business plan for family day care

Daycare Business Plan Template

Written by Dave Lavinsky

Business Plan Outline

• Daycare Business Plan Home
• 1. Executive Summary
• 2. Company Overview
• 3. Industry Analysis
• 4. Customer Analysis
• 5. Competitive Analysis
• 6. Marketing Plan
• 7. Operations Plan
• 8. Management Team
• 9. Financial Plan

Daycare Business Plan

You’ve come to the right place to easily complete your daycare business plan.

We have helped over 100,000 entrepreneurs and business owners create business plans and many have used them to start or grow their daycares.

How To Write a Daycare Business Plan & Example

Below are links to each section of your daycare business plan template:

• Executive Summary – This is a brief overview of your daycare business plan. The executive summary should be no more than 2 pages long, with brief summaries of other sections of the plan.
• Company Overview – This is where you provide a business description, including your company history, business structure, and any pertinent information about the daycare center.
• Industry Analysis – The industry analysis describes the daycare industry, including market size and trends.
• Customer Analysis – This section of your daycare business plan describes your target market and potential customers. You will detail the demographics, needs, and wants of your target audience and how you plan to meet those needs.
• Competitive Analysis – The competition in your local area will be described here, along with how your daycare business will compete in the market.
• Marketing Plan – Your marketing plan will describe your daycare’s marketing strategy, including your advertising and promotion plans.
• Operations Plan – This section of your business plan describes how your daycare will be operated on a day-to-day basis. It may also include your long-term plans for expansion and the milestones you want to achieve to get there.
• Management Team – The management team section of your business plan should describe the experience and qualifications of your management team including the director, teachers, and support staff.
• Financial Plan – The financial plan section of your daycare business plan should include your financial statements, such as your income statement, balance sheet, and cash flow statement.

Next Section: Executive Summary >

Daycare Business Plan FAQs

What is a daycare business plan.

A daycare business plan is a plan to start and/or grow your daycare business. Among other things, a good daycare business plan will outline your business concept, identify your target customers, present research about the child care industry, detail your marketing plan, and provide your financial plan.

You can  easily complete your daycare business plan using our Daycare Business Plan Template here .

What Are the Main Types of Daycare Businesses?

There are different types of daycare businesses that parents can choose from for their child's needs. A traditional daycare center is most sought after by working parents since it provides child care during regular work hours. There are also in-home daycare centers that are licensed to provide child care in a home setting with fewer children. Other child care centers provide hourly care services by trusted babysitters or nannies and are operating on an as-needed basis.

What Are the Main Sources of Revenues and Expenses for a Daycare Business?

The primary source of revenue for a daycare business is its child care services.

Some key expenses for a daycare business is rent, salaries for staff, utilities and snacks expenses for the children.

How Do You Get Funding for Your Day Care Business Plan?

A daycare or child care center is typically funded through small business loans, personal savings, credit card financing and/or angel investors. This is true for a business plan for daycare or a childcare business plan.

What are the Steps To Start a Daycare Business?

Starting a daycare can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Day Care Business Plan - The first step in starting a business is to create a detailed child care business plan that outlines all aspects of the venture. This should include market research on the childcare industry and potential target market size, information on the services you will offer, marketing strategy, pricing strategies and detailed financial projections.

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your daycare business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your daycare business is in compliance with local laws.

3. Register Your Daycare Business - Once you have chosen a legal structure, the next step is to register your daycare business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 

4. Identify Financing Options - It’s likely that you’ll need some capital to start your daycare business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 

7. Acquire Necessary Daycare Equipment & Supplies - In order to start your chlidcare business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your childcare   business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising to reach your target audience.

Learn more about how to start a successful daycare business:

• How to Start a Daycare Business

Where Can I Get a Daycare Business Plan Example PDF?

You can download our daycare business plan PDF template here. This is a business plan template you can use in PDF format.

How to Write a Business Plan for a Daycare: Complete Guide

• January 30, 2023

👇 Check all our resources on daycares 👇

Whether you’re looking to raise funding from private investors or to get a loan from a bank (like a SBA loan) for your daycare, you will need to prepare a solid business plan.

In this article we go through, step-by-step, all the different sections you need in your daycare business plan. Use this template to create a complete, clear and solid business plan that get you funded.

1. Executive Summary

The executive summary of a business plan gives a sneak peek of the information about your business plan to lenders and/or investors.

If the information you provide here is not concise, informative, and scannable, potential lenders and investors will lose interest.

Though the executive summary is the first and the most important section, it should normally be the last section you write because it’s the summary of the different sections included in your business plan.

Why do you need a business plan for your daycare?

The purpose of a business plan is to secure funding through one of the following channels:

• Obtain bank financing or secure a loan from other lenders (such as a SBA loan )
• Obtain private investments from investment funds, angel investors, etc.
• Obtain a public or private grant

How to write an executive summary for your daycare?

The executive summary of your daycare business plan should include the following important information:

Business Overview

Introduce your company (its name, its mission) and the history behind it: why did you decide to create a daycare in your area today? Why you? 

Also, that’s where you should expand on the business: where will the daycare facility be located? How old are the children you target? How many children will you be able to take care of? What are the amenities (classrooms, playground, cafeteria, etc.)? 

Market Overview

Provide here a deep market analysis that backs your decision to open a daycare business in your area today. Why would your business succeed given current market conditions? 

For example, the market analysis should include information like: what are your competitors in the area? What are their characteristics, strengths and weaknesses ? Who are your target audience (parents and children)? Is that in line with the demographics in your area?

Management & People

Who is the management team? What is your/their experience in the daycare industry?

Financial plan

What is your expected revenue and profitability for the next 5 years? When do you expect to break-even? Simply include here a chart of your key financials (e.g. Revenue, Gross Profit, Net profit )

Funding Ask

What loan/investment/grant are you seeking? How much do you need? How do you intend to spend the money?

Daycare Financial Model

Download an expert-built 5-year Excel financial model for your business plan

2. Daycare Business Overview

The business overview section of the daycare business plan summarizes the basics of your facility, including the background information, business model, services, target audience, and legal structure. 

a) History of the Project

When you launch a daycare business, you want it to grow and even become the best in the region if possible. One small element that can catalyze your company’s growth is its history. You don’t have to exaggerate the information here, but try to include useful details that will make your daycare business stand out. 

For a business as sensitive as daycare, trust overrides anything else. So, make sure to include in your business plan your experience and passion for children to demonstrate to investors you are qualified and the right person to successfully run a new daycare facility.

Also, flesh out the history behind the project: why are you starting a daycare now? For example, you may have noticed a lack of child care services for toddlers and infants in the city.

b) Business Model

Next up is the business model. This is the revenue-generating plan that identifies how your business operates. A daycare business model should be succinct and address specific things about the business. 

For instance, is it a commercial daycare facility or a family daycare? Is it an independent facility or a partnership? And should you opt for a daycare franchise? 

Keep in mind that daycare facilities vary by the target age group. So, you can opt for a childcare center, a family daycare, a kindergarten/pre-school, or a nursery school.

c) Daycare Services

It takes a lot to raise a child. So, be clear on the services you want to offer in your newly founded daycare facility. The quality of services will make your business more attractive. But an even bigger factor will be the type of services you provide at the facility.

Indeed, a lot happens inside a daycare facility, from hands-on learning (classrooms, private tuition) to field trips, games and community events. 

d) Pricing Strategy

Age is a key factor when setting the prices of your daycare services. On average, parents across the US pay about $9,400 per year on child care per child. Of course, the actual figure will vary based on a number of factors, but this is a great starting point when getting into the industry. 

An accurate pricing strategy can help you outshine your biggest competitors. However, don’t forget that setting cheaper prices isn’t necessarily the best strategy, just in the same way overpriced services may turn off potential clients. 

e) Target Audience

Daycare centers are so named because they are about a child’s well-being. However, the final decision rests with the parents, who must buy into your idea and long-term vision for the facility. 

For this type of business, you have a definite target market . And all you have to do is ensure your facility is closer to a busy neighborhood with many children. Find out if the families truly need child care services, why they need these services and the children’s average age. 

Finally, make sure your services are aligned with your target audience. For example, you wouldn’t necessarily succeed with a daycare operating 9am – 4pm in an area where parents typically work long hours in the city and need time to commute back to their neighborhood to pick up their kids.

Same goes for pricing: if you offer high-quality expensive daycare services, make sure your daycare is either located close to offices or in an area where affluent parents work or live.

f) Legal Structure

Finally, your business overview section should specify what type of business structure you opt for. Is this a corporation or a partnership (LLC)? Who are the investors? How much equity percentage do they own? Is there a Board of Directors? If so, whom? Do they have experience in the industry?

3. Daycare Market Overview

In the market overview section of your business plan, you must cover 2 important areas:

• Market trends : how big is the daycare industry in your area? How fast is the market growing? What are the trends fuelling this growth (or decline)?
• Competition analysis : how many competitors are there? How do they compare vs. your business? How can you differentiate yourself from them?

a) Daycare Market Trends

How big is the daycare industry in the us.

It’s always helpful to base your business decisions on the latest trends in the US market. For instance, the US daycare market had a value of approximately $54.3 billion in 2019 . And it is projected to grow at an annual rate of 3.9% from 2020 through 2027. 

According to reports, the high number of parents occupying full-time and part-time jobs is a major driving force behind the increasing demand for daycare services. No matter how you look at it, these statistics make the daycare business even more lucrative, provided you get all the basics right through your business plan. 

How big is the daycare industry in your region?

After the US, assess the size of the daycare market in your city or area. Focus on the zone where you plan to offer daycare services.

Naturally, you might not be able to get the data for your specific city or region. Instead, you can estimate the size of your market, for more information on how to do it, read our article on how to estimate TAM, SAM and SOM for your startup . To give you an example, let’s assume you plan to operate in an area where there are already 10 competitors:

As we know the US daycare industry is worth $54 billion today, and there are about 230,000 child care centers , therefore the average annual turnover per child care center is around $235,000.

Now, we can safely assume that the daycare industry is worth $23 million in your area (10 centers).

How fast is the daycare industry growing in your region?

Growth is an important metric for assessing the status of the daycare industry in your region. 

Here if you don’t find information online or via your research, you can calculate growth using the total number of competitors in your area. 

For example, assuming there were 8 daycare competitors in the region in 2018, and 10 in 2022, the annual growth rate is 6% per year.

b) Daycare Competitor Analysis

At the very least, your competitor analysis should answer all the questions below:

• How many daycare businesses are the area where you plan to open yours?
• What type of daycare businesses are there: home-based vs. center-based home care, early care vs. early education & daycare, etc.
• What age range do they specialise in?
• What services do your competitors offer?
• What amenities do your competitors have (playground, classrooms, etc.)
• What’s their average price (daily rate / monthly rate)?
• What is the child / staff ratio of your competitors?

4. Sales & Marketing Strategy

For some existing daycare facilities, marketing isn’t the most important aspect of running the business. But you’ll probably have to implement a few marketing strategies at the beginning to attract the first families , especially if you’re starting a new daycare facility.

a) Daycare Market Channels

A daycare business doesn’t have diverse marketing channels like retail stores or other businesses. So, this may limit your options when it comes to new marketing channels. 

Apart from word of mouth, other marketing channels include;

• Social media
• Online listing (Google business, Facebook business page)
• Word-of-mouth

b) What are Your Unique Selling Points (USPs)? 

Daycare facilities offer pretty much the same services, and it’s not easy to stand out from the competition. However, a few factors can be useful when evaluating your opportunities in a competitive market, including:

• Target age group : You may cover a unique age group as opposed to your competitors
• Opening hours : you may offer longer opening hours to accommodate for different parents’ jobs and availabilities
• Price : Your services may be cheaper than your competitors
• Quality & amenities : Quality services and extra amenities (outdoor playground, etc.) will make your daycare facility more attractive vs. competitors
• Services : Your services may go beyond the standard hands-on learning and kid games 

5. Management & People

The 5th section of your daycare business plan should be about people. It should include 2 main elements:

• The management team and their experience / track record
• The organizational structure: what are the different teams and who reports to whom?

a) Management

Here you should list all the management roles in your company.

Of course, the amount of details you need to include here varies depending on the size of your company. For example, a small daycare business run by 1 or 2 persons doesn’t need the same level of detail vs. a large center with 50 children or more.

If you plan on running your business independently, you may write a short paragraph explaining who are the co-founders and/or senior managers (if there are any in addition to yourself). It’s important to highlight their experience in the industry and previous relevant professional experiences.

b) Organizational structure

No matter how many leadership roles there are, you should now explain how you intend to run the company from a management standpoint.

What are the different teams (management, childcare staff, cooking staff, human resources, finance, etc.)?

Note that you should include these details even if you haven’t hired anyone yet. It will show lenders and investors that you have a solid hiring and management plan to run the business successfully.

A great addition here is to add an organizational chart that list all the roles, from Directors to managers, key supervisory roles and employees. Make sure to highlight with reporting lines who manages/supervises whom.

6. Financial Plan

The financial plan is perhaps, with the executive summary, the most important section of any business plan.

Indeed, a solid financial plan tells lenders that your business is viable and can repay the loan you need from them. If you’re looking to raise equity from private investors, a solid financial plan will prove them your daycare is an attractive investment.

There should be 3 sections to your financial plan section:

• Your historical financials (only if you already operate the business and have financial accounts to show)
• The startup costs of your project (if you plan to start a new daycare facility, or add capacity to an existing daycare center, renovate your facilities, etc.)
• The 5-year financial projections

a) Historical Financials (optional)

In the scenario where you already have some historical financials (a few quarters or a few years), include them. A summary of your financial statements in the form of charts e.g. revenue, gross profit and net profit is enough, save the rest for the appendix.

If you don’t have any, don’t worry, most new businesses don’t have any historical financials and that’s ok. If so, jump to Startup Costs instead.

b) Startup Costs

Before we expand on 5-year financial projections in the following section, it’s always best practice to start with listing the startup costs of your project.

For a daycare, startup costs are all the expenses you incur before you open the space to your customers. These expenses typically include: renovation costs, equipment and furniture, etc.

The startup costs for opening a child care center depend on various factors such as the location and size of your daycare facilities, the capacity (the number of children you plan to have), the quality of the amenities, etc. 

We’ve identified that it costs anywhere between $130,000 to $490,000 to start a daycare business with 50 children . See below the cost estimates.

Note that these costs are for illustrative purposes and depend on several factors which might not fully apply to you. Let’s first start below with startup costs. 

c) Financial Projections

In addition to startup costs, you will now need to build a solid daycare financial model over 5 years.

Your financial projections should be built using a spreadsheet (e.g. Excel or Google Sheets) and presented in the form of tables and charts in your business plan.

As usual, keep it concise here and save details (for example detailed financial statements, financial metrics, key assumptions used for the projections) for the appendix instead.

Your financial projections should answer at least the following questions:

• How much revenue do you expect to generate over the next 5 years?
• When do you expect to break even?
• How much cash will you burn until you get there?
• What’s the impact of a change in pricing (say 10%) on your margins?
• What is your average customer acquisition cost?

You should include here your 3 financial statements (income statement, balance sheet and cash flow statement). This means you must forecast:

• The number of children over time ;
• Your expected revenue ;
• Operating costs to run the business ;
• Any other cash flow items (e.g. capex, debt repayment, etc.).

When projecting your revenue, make sure to sensitize pricing and the number of members as a small change in these assumptions will have a big impact on your revenues.

When it comes to the costs, consider both startup and operating costs. For more information, read our complete guide here .

7. Funding Ask

This is the last section of the business plan of your daycare center. Now that we have explained what type of daycare services your company would offer, at what price, your marketing strategy , management and people, this section must now answer the following questions:

• How much funding do you need?
• What financial instrument(s) do you need: is this equity or debt, or even a free-money public grant?
• How long will this funding last?
• Where else does the money come from? If you apply for a SBA loan for example, where does the other part of the investment come from (your own capital, private investors?)

Use of Funds

Any business plan should include a clear use of funds section. This is where you explain how the money will be spent.

Will you spend most of the loan / investment to buy the real estate and do the renovations? Or will it cover the cost of the salaries of your childcare staff and other employees the first few months?

Those are very important questions you should be able to answer in the blink of an eye. Don’t worry, this should come straight from your financial projections. If you’ve built solid projections like in our daycare financial model template , you won’t have any issues answering these questions.

For the use of funds, we recommend using a pie chart like the one we have in our financial model template where we outline the main expenses categories as shown below.

Privacy Overview

The Daycare Business Plan Blueprint (Examples + Template)

April 14, 2022

Adam Hoeksema

Starting a daycare business can be a daunting task. There are so many things to think about and plan for. You need to find the perfect location, get the right licenses and permits, hire qualified staff, and, most importantly, create a daycare business plan. 

Creating a daycare business plan is one of the most important steps in starting your business. A well-thought-out business plan will help you get funding, attract investors, and operate your business effectively. 

The bad news is that there is a lot of advice out there on writing a business plan. With so much information and tons of daycare business plan examples to choose from, it can be overwhelming to know where to start. 

The good news is, we've got you covered. In this article, we'll give you a comprehensive guide on how to write a daycare business plan. We will also provide some examples and a free daycare business plan template to get you started. 

But First...Is a Daycare a Good Business to Start? 

Before we talk about how to create a daycare business plan, let's first answer the question: is starting a daycare a good business to get into? 

The answer is a resounding yes! The daycare industry is growing rapidly. It is one of the few businesses that are not only recession-proof but also thrives in uncertain economic times. 

According to the National Association of Child Care Resource & Referral Agencies (NACCRRA), the demand for child care services has increased by 26% over the last decade. This demand is only expected to grow in the coming years. 

When it comes to profitability, the daycare industry is very attractive. According to IBISWorld , the average profit margin for a daycare business is around 15%. That's higher than the average for most other industries! 

If you're thinking about starting a daycare business, know that you are getting into a very profitable and in-demand industry. Now let's talk about how to write a daycare business plan that will help you start and grow your business successfully.

How to Create a Daycare Business Plan 

A daycare business plan is as simple as a word document with the following sections:

• Business Description
• Market Analysis

Business Model

• Location and Facility
• Marketing Plan
• Financial Plan

Executive Summary

This article will provide context of what to include in each section of your daycare business plan. As you work on writing your business plan, you will want to grab our daycare financial projection template as well in order to complete the financial plan section.

Your daycare business plan should be an elevator pitch in itself. It should be attractive to potential partners and investors. Basically, it should give them a clear idea of your business, where it is located, what services you offer, who your target market is, and how you plan to make money. 

Creating a daycare business plan doesn't have to be complicated. In fact, the cheapest and easiest approach is to simply start with a blank word document and work through each of the above sections, it can be pretty easy. Here is a step-by-step guide on how to create a daycare business plan: 

Create a Compelling Business Description

Your daycare business's unique selling point (USP) should be the first thing you include in your business plan. What is it that makes your daycare center different from all the others? 

This description should be the foundation of your marketing efforts as well.

There are a few questions you should answer in your company description. They include:

What's your Curriculum Based On?

Potential investors, partners, and even customers will be interested in knowing what your curriculum is based on. This will help them understand the environment children will be in a while under your care. 

When describing your curriculum, make sure to include:

• What age ranges do you cater for?
• The type of care you offer (full-time, part-time, drop-in) 
• Your educational philosophy 
• The activities and programs you offer 

For example, if your daycare is unique by offering a Montessori curriculum, you will want to highlight that.  In fact, you can learn more about how to start a Montessori program here . 

How Big is Your Facility? 

The size of your facility will say a lot about the type of operation you're running. Are you a small, home-based daycare or a large center with multiple classrooms? 

This section of your business plan may include: 

• A floor plan of your facility 
• The capacity of your facility 
• The number of employees you have 
• Type of equipment and furniture you have 

Who Is Your Target Market? 

You can't market to everyone, so you must identify your target market. This will help you focus your marketing efforts and ensure that you're reaching the right people. 

Below is a daycare business plan example that shows how your business description should be:

“ABC Daycare is a small, home-based daycare located in San Francisco, CA. We cater to children aged 0-12 years old and offer full-time, part-time, and drop-in care. 

Our curriculum is based on the Reggio Emilia approach, emphasizing hands-on learning and collaboration. Activities and programs include arts and crafts, music, and outdoor play. 

Our facility can accommodate up to 12 children at a time. We have a staff of four employees who are all CPR and First Aid certified. 

Our target market is working parents in the city who need quality child care but can't afford the rates of larger daycare centers.  We've created an affordable subscription-based pricing model for our target market to fulfill the demand. We generate revenue through monthly subscriptions and have low operating costs due to our small size. 

Our suppliers are local businesses that provide us with food, toys, and other supplies.” 

Do a Thorough Market Analysis

After writing a compelling description of your business, you need to do a thorough marketing analysis. This analysis will help you determine your target market, what type of advertising and promotion will work best, and how to price your services. 

You should also research the competition and see what they are doing right and wrong. This information will be invaluable as you create your daycare business plan.

Keep these things in mind when doing a market analysis:

The Size of Your Market

This is determined by the number of potential customers in your area who need or want your services. 

For example, if you live in a small town with only a few thousand people, there may not be enough demand to support a large daycare facility. 

On the other hand, if you live in a city with hundreds of thousands of people, there may be room for multiple daycare facilities. 

Your target market is the segment of the population that is most likely to use your services. This includes factors like age, income, education, and location. 

After you've identified your target market, you need to show how you plan on fulfilling the demand. This is where your business model comes in. 

Your business model is a detailed description of how your daycare will operate daily. It should include: 

• How do you plan on acquiring customers? 
• What are your pricing strategies? 
• How will you generate revenue? 
• What are your operating costs? 
• Who are your suppliers? 

Your business model should be detailed and easy to understand. It should also be realistic and achievable. 

Here is a daycare business plan example of a business model for a small daycare center: 

“The daycare will be open Monday through Friday from six in the morning to six at night. We will offer care for children ages six weeks to twelve years old. 

Our rates will be $50 per week for one child and $40 per week for each additional child from the same family. We will offer a discount of $20 per week for families who enroll their children for an entire year. 

We will generate revenue by charging weekly rates for our services. Our operating costs will include rent, utilities, supplies, and salaries for our employees. Also, we will acquire customers through online advertising and word-of-mouth.” 

As you can see, a business model is a detailed description of how your business will operate. It's essential to have one in place before promoting and selling your services. 

One thing you should not forget to include in your daycare business plan is the location of your business and your rental agreement. If you are renting a space, including the terms of your agreement and how long you have the space. If you are purchasing a property, include information on the property, such as square footage and any special features that will help your business stand out. 

This daycare business plan example shows you how to include this vital information: 

“The daycare will be located at 123 Main Street in a commercial space currently leased by the owner. The lease agreement is for three years with an option to renew for an additional three years. The monthly rent is $2000, and the security deposit is $3000. 

The daycare will have exclusive use of the main floor, including a large open play area, a small kitchen, two bathrooms, and four classrooms. The daycare will also have access to the outdoor playground.

80% of our space will be used for childcare, with the other 20% used for our administrative offices and staff lounge. 

We have chosen this location because it is close to several residential neighborhoods and has easy access to public transportation. The space is also large enough to accommodate our future growth.” 

There are many daycare business plan templates you can use to help you get started. This is a basic outline of what should be included.

Daycare Marketing Plan

Most daycare business plan templates will include a section for your marketing plan. Most people overlook the marketing aspect of their business, but it is one of the most important pieces of your puzzle. 

In your business plan, you need to outline your target market, your marketing strategies, and how you plan on executing those strategies. 

You also need to set aside a budget for your marketing efforts. Many people make the mistake of thinking that they don't need to spend money on marketing, but that couldn't be further from the truth. 

The following daycare business plan example shows you how you should describe your marketing efforts:

"Our target market is working for families with children between six weeks and five years old. We will reach our target market through online and offline marketing efforts. 

Some of the offline marketing strategies we will use include print advertising, flyers, and word-of-mouth referrals. We will use a mix of SEO, content marketing, and social media for online marketing. 

We have set aside a budget of $500 per month for our marketing efforts."

As you can see from the example above, your marketing plan should be clear, concise, and to the point. Don't forget to include a budget!

Daycare Financial Plan

Your business plan should include a financial plan section. This is where you'll lay out how much money you need to start or grow your business. Be specific and include dollar amounts. If you're seeking a loan, including information on how much you're requesting and how you'll use the funds.

You should also include a detailed budget in your business plan. Your budget should include all of your projected income and expenses for at least the first year of operation. Creating a budget will help you get a clear picture of what it will cost to start and operate your business.

This section should include projected costs for:

• Rent or mortgage payments
• Advertising and marketing
• Operating expenses such as utilities, supplies, and more. 

Startup costs are another vital item to include in your business plan. This is the money you need to purchase equipment, furniture, or any other items to get your business up and running.

If you plan to secure a loan, your lender will want to see a detailed business plan with information on how you plan to use the loan funds. Ensure you include this information in your business plan to increase your chances of securing funding.

If you're seeking funding from investors, you'll need to include information on how they will be compensated. This is typically done through equity, a percentage ownership stake in your business. 

For example, if you seek $100,000 in funding and offer a 20% equity stake, the investor will own 20% of your business. 

Make sure you use a daycare business plan template that includes a section on funding to ensure you include all the necessary information. If you’re planning to get a loan or seek investment, you’re going to need full financial projections. Our daycare financial model will provide up to 5 years of projected income statements, cash flow and balance sheet forecasts.

Next I want to answer some key financial questions for you as you consider how to forecast your daycare financials. I am going to hit on:

• Daycare Startup Costs
• Daycare Revenue 
• Daycare Facility Operating Expenses
• Daycare Profitability

Let’s dive into some key questions. 

How much does it cost to start a daycare? 

It costs between $10,000 and $50,000 to start an in-home daycare business according to Bizfluent . 

It costs between $59,000 and $3 million dollars to start a daycare facility according to Bizfluent . 

So obviously this is a huge range in startup costs.  The main thing that will determine your startup costs is your daycare facility.  Depending on how large your daycare is, whether you are buying, building, or leasing the space, and how much renovation needs to be done, your startup costs can vary drastically.  

Some tips to help you estimate a cost of a daycare facility:

• A daycare facility should have 35 square feet of open floor space indoors per child. 
• So if you wanted a facility that could care for 100 children you would need 3,500 square feet of indoor space for children, plus additional space for offices, kitchen, bathrooms, etc.  Let’s assume that you would need at least 5,000 square feet of space for a daycare facility that served 100 children.  
• A daycare center would cost at least $295 per square foot to construct in the U.S. based on data from Levelset . 
• Constructing a new 5,000 square foot daycare center would likely cost at least $1,475,000 based on $295 per square foot.  
• Now you might not be constructing new, rather you might rent an existing facility which could require renovations.  You will need to get a specific quote for the specific renovations that you need for your space. 

How much revenue can a daycare business make?

A daycare facility can generate $17,680 in revenue per year per child according to Zippia .  

A daycare business with 100 children can generate over $1.75 million per year in annual revenue based on our average revenue per child of $17,680. 

How much does daycare cost?

The average cost of daycare is $17,680 per year, per child in the U.S. according to Zippia . 

This means that the average monthly cost of daycare in the U.S. is roughly $1,475.

What is the typical child to staff ratio for a daycare? 

The typical child to staff ratios for a daycare are:

• 1 adult staff for every 4 infants (age 0 to 12 months)
• 1 adult staff for every 6 toddlers (age 1 to 3 years)
• 1 adult staff for every 10 pre schoolers (age 3 to 5 years)
• 1 adult staff for every 12 school aged children (5+ years old)

Source - Childcare.gov

These ratios will help you estimate how many staff members you will need.  Our financial projection template makes this easy.  Just enter in your ratios and the number of children you expect to have in each age group and the model will automatically calculate the number of staff required to maintain your ratios.  See the input daycare staffing table below:

What are the typical operating costs for a daycare? 

Your largest operating expense for a daycare facility is likely to be your rent. 

It should cost between $20 and $30 per square foot to rent a daycare center space based on available spaces on Loopnet . 

Other operating costs for a daycare center include:

You can see how you can enter in your operating costs into our financial model below:

How much profit can a daycare make? 

The average daycare profit margin is 6.5% according to Daycare Business Boss . 

Once you complete your projections you will want to take a look at our At a Glance tab to make sure that your projected profit margins aren’t way out of line with the industry norms.  You can find projected profit margins for your daycare below:

This is an important aspect that you may not find in most daycare business plan templates, but it's still essential. An appendix includes any additional information to help you understand your business plan. This might include things like your:

• Business licenses 
• Insurance policy 
• Lease agreement 
• Sample contracts 
• Staff bios 

This section adds credibility to your daycare business plan and shows that you've done your homework. Including all of the necessary details in your appendix will give investors peace of mind and show that you're serious about starting a daycare center.

An executive summary is a brief overview of your business plan and is often considered the most important section. It should be two pages long, with a clear description of your business, your goals, and why you will achieve them.

There are several key elements to include in your executive summary:

• Business Name: This is the name you have chosen for your business.
• Location: Include the city, state, and country where your business will be located.
• Business description: Describe what type of business you will be operating.
• Target market : This is the group of people you will be targeting as customers.
• Competition: Who are your competitors, and how will you compete with them?
• Product or service : What product or service will you be offering?
• Sales and marketing: How will you generate sales?
• Financials: Include a five-year income statement, balance sheet, and cash flow statement.
• Management team: Introduce your management team and their experience.
• Exit strategy : This is the plan for how you will eventually sell or otherwise exit the business in case you decide to retire or move on to other projects.

The executive summary is the most crucial section of your business plan because it gives investors and lenders a quick overview of your company and its prospects. Be sure to include all of the key elements listed above, and keep it under two pages in length.

What Are The Benefits of Creating a Daycare Business Plan?

Research shows that a business plan helps business owners make better decisions, turn abstract goals into tangible objectives, and track progress over time. But what does this mean for those who want to open a daycare? 

Creating a business plan forces you to think through every step of starting your company. It's a valuable exercise that can save you time and money in the long run. Even if you don't end up following your business plan to a tee, the process of writing it will help you better understand your business and what needs to be done to make it successful. 

There are many benefits to creating a daycare business plan, including: 

Gives You a Roadmap to Follow

As with any journey, it's always helpful to have a map. A business plan is that map for your daycare business. It will give you a clear idea of where you want to go and how you can get there. 

Helps You Secure Funding

A business plan is essential if you're looking for investors or loans. It will show potential lenders and investors that you've put thought into your business and have a solid strategy for making it successful. 

Ensures Your Daycare Business is Feasible

When you're starting a business, it's easy to get caught up in the excitement and overlook potential problems. A business plan forces you to take a step back and assess whether your business is truly viable. It also helps you identify any areas where additional research is needed. 

Final Thoughts

A daycare business plan is a valuable tool to help you make your business successful. 

It is worth noting that your business plan is not a one-time exercise but should be updated regularly as your business grows and changes. This document is meant to be a living document that evolves as your business does. 

If you're unsure where to start, there are plenty of resources available to help you, including daycare business plan examples online, books, and daycare business plan templates. 

You can also use our daycare projection template to get your financial plan ironed out and ready for your business plan.

The most important thing is just to get started. The sooner you create your business plan, the better prepared you will be for success.

You can get the Daycare Facility financial projection template here!

The template is simple to use and will save you loads of time while still producing professional looking daycare projections. ProjectionHub has helped more than 50,000 businesses create financial projections so you can be confident that you can do it too.

The daycare business projection template includes:

5 Year Daycare Facility Pro Forma Financial Statements

CPA Developed & Completely Customizable

Free Support & Projections Review

Compatible with Google Sheets

Free expert review of your completed projections

The template is easy to use and you do not need to be an excel wizard to fill it out. Editable cells are highlighted in blue, a video guide is included, and our team is available to answer any questions you have.

You can see the complete walkthrough and demonstration of the daycare business forecast template here:

Get the template today for just $79

If you have any questions before purchasing, please feel free to begin a live chat or email us at [email protected]

100% money back guarantee in accordance with our terms and conditions

‍ Photo by Pixabay

About the Author

Adam is the Co-founder of ProjectionHub which helps entrepreneurs create financial projections for potential investors, lenders and internal business planning. Since 2012, over 40,000 entrepreneurs from around the world have used ProjectionHub to help create financial projections.

Other Stories to Check out

How to know if your financial projections are realistic.

It is important for financial projections for a small business or startup to be realistic or else an investor or lender may not take them seriously. More importantly, the founder may make a financial mistake without a reliable plan.

How to Finance a Small Business Acquisition

In this article we are going to walk through how to finance a small business acquisition and answer some key questions related to financing options.

How to Acquire a Business in 11 Steps

Many people don't realize that acquiring a business can be a great way to become a business owner if they prefer not to start one from scratch. But the acquisition process can be a little intimidating so here is a guide helping you through it!

Have some questions? Let us know and we'll be in touch.

• Credit cards
• View all credit cards
• Banking guide
• Loans guide
• Insurance guide
• Personal finance
• View all personal finance
• Small business
• Small business guide
• View all taxes

You’re our first priority. Every time.

We believe everyone should be able to make financial decisions with confidence. And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free.

So how do we make money? Our partners compensate us. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. Here is a list of our partners .

How to Start a Day Care: A Step-by-Step Guide

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money .

If you’re a teacher, former teacher, or simply have years of experience caring for children — and an entrepreneurial streak — you might have considered starting your own day care center, either from home or in a dedicated facility. And at an expected job growth of 7% over the next decade, working in child care is a stable career choice. So, if you’re seriously wondering how to start a day care center, you’ve come to the right place.

As is the case starting a business in any industry, however, your passion for your craft alone — or, in this case, your students — isn’t quite enough to ensure that your day care business is copacetic, either financially or legally. You’ll need to do a good amount of due diligence when looking into how to start a day care business, paying special attention to licensing requirements, and ensuring that your facility and program aligns with your state’s health and safety codes.

If you’re a pro at educating, training, supporting and generally corralling large groups of small children, you should be pretty unperturbed by the work it takes to start a day care business. Here’s what you need to know.

How to start a day care business

Although every path toward starting a business looks different for every business owner, there are a few steps that every aspiring day care owner needs to think about when it comes to how to best start a day care.

1. Decide what kind of day care business you want to start

Before you can even get to writing a business plan for your day care business, you need to decide what kind you want to open. Look into whether you want to start a day care business at home, or whether you want a more commercial facility — there might be different permits required in your municipality depending on which you choose. You also need to decide what age groups you want to focus on.

Next up, you'll have to decide on a business entity, which will have huge effects on the way you're taxed and how you operate your day care business. Will you have partners or open your business on your own? Additionally, you'll want to consider whether you want a business entity that offers you some protection. Making your day care center a limited liability company might be a good move, since the business will take on liability should anything go wrong.

You might also decide to buy into a day care franchise opportunity. This option will significantly streamline the steps you need to take in opening your day care.

Once you narrow down these details about your business, you can move on to the next step in starting a day care business: writing a business plan.

How much do you need?

with Fundera by NerdWallet

We’ll start with a brief questionnaire to better understand the unique needs of your business.

Once we uncover your personalized matches, our team will consult you on the process moving forward.

2. Write a day care business plan

This is a step you have to take when starting any business and it can be quite a bit of work, especially for anyone looking to get moving quickly on their business. When you start writing a business plan, start with an outline of all the things you want to include.

Your plan should include a summary, an overview of the company, a market analysis that includes an assessment of the need for a business like yours, a marketing and sales plan, and a financial plan along with financial projections. Don't worry, though, you can always add to it as your business grows.

One thing you should include, though, is market research. The last thing you want to do is go through all of these "how to start a day care business" steps, only to find that there isn't a market for one or that there are already too many day cares in that area to make it a viable business.

Your business plan should also include a budget. The costs associated with opening and running your day care center can never be accurately totaled, but nailing down a budget will give you some parameters to work within (and some peace of mind).

In your budget plan, don’t forget to factor in:

Your startup costs, including day care equipment, food, toys and educational tools, wages, insurance and licensing.

How much tuition you’ll charge.

Your predicted revenue over the next two to three years.

When you’ll break even.

Also know that day care centers can claim certain tax deductions, which can ease your annual financial burden.

You'll also want to include a marketing plan. If you’re seriously researching how to start a day care business, it’s likely that you’ve already been caring for children in your area for some time and have built up a network of local parents. That’s one valuable method of attracting customers (aka word of mouth) covered. Still, implementing even a basic marketing plan can help define and legitimize your business — and if you need to implement a waitlist as a result, that’s great too!

Your marketing efforts can be relatively simple and low-cost. You can start by creating a Facebook page for your day care center and building a business website, making sure to include your contact information and a little bit about your business. If possible, plan to include pictures of your facilities and testimonials from happy customers.

If you’re a fan of social media, it also can’t hurt to create an Instagram, LinkedIn and/or Twitter account to keep both current and prospective customers updated on your business. Just be sure that once you do, you receive permission from parents or guardians before posting pictures of their children, of course.

Analog marketing techniques would work well here, too. If possible, consider distributing flyers or brochures to nearby libraries, schools, places of worship or any other local gathering spots.

3. Obtain the necessary certification and licenses

You may not need a master’s degree in education to become a day care teacher, but each state does require some combination of licensing and certification when it comes to how to start a day care. Visit your state’s Division of Child Care Services (or its equivalent) to find out the training, experience and credentials you need to legally operate a day care facility.

In New York State, for instance, the head of the day care facility must have one of the following:

An associate degree in early childhood education or an equivalent.

A CDA credential (child development associate) and at least two years of experience caring for children.

A high school diploma and at least three years’ experience caring for children.

You'll probably find that there are some other requirements that usually come up when you're looking up how to start a day care business at home or in another facility. Your state may require that you and any staff you hire are CPR-certified, for one. Another point of safety to remember is that you should be trained in at least basic first aid for children. You and your staff might also need to be fingerprinted and undergo background checks before being cleared for work.

Even if your state doesn’t require that you obtain a license, you should consider doing so, as your licensing course will go over all the boxes you need to check to operate your day care in your state — including health and safety regulations, proper food preparation and the required child-to-adult ratio.

4. Find a (safe) day care facility

In certain states, in order to obtain the proper licenses or registration to start your day care business, you’ll first need to show that your day care facility meets your state’s health and safety requirements.

So whether you choose to open your day care facility in your own home, or buy or lease a new property, you’ll need to make sure your facility meets zoning, fire, and health and safety laws. When it comes to how to start a day care at home, you may need to make alterations to your house to comply with day care requirements in your state, so be sure to factor them into your budget.

5. Get insured

Another requirement for obtaining your license? Getting insured. In certain states, you’ll need to be licensed by the Department of Health and Human Services to run your day care center, but to do so, you’ll first need liability insurance.

The exception is home-based day care centers, which don’t need insurance to be licensed by the DHHS. Still, those opening day care centers at home should seriously consider obtaining small business insurance. You always run the risk of a lawsuit when you’re running your own business, but that risk increases when caring for other people’s children — so protect yourself whenever possible.

There are several types of insurance that cover day care businesses — general liability insurance, workers’ compensation, property insurance, abuse and molestation insurance and others — so contact an insurance broker to help you decide which coverage is best for your business.

6. Get a business checking account and credit card

Get a business credit card and a business checking account early on to help you keep your business expenses separate from your personal expenses when first starting a day care.

It’s crucial to separate your personal and business expenses for many reasons, not the least of which is to reduce your (or your accountant’s) burden come tax season. It’s simply the most professional way to conduct your business, too. Set yourself up for success now by signing up for a business credit card and opening a business bank account, and be diligent about using both solely for your day care’s finances.

Having a business credit card can help you increase your business credit score, too. By paying the card off on time — or early if you can — you can boost your score, which will help you late on when you need a loan or other financing for your day care business.

7. Get financing

Most entrepreneurs bootstrap their businesses at the beginning, as it’s difficult for brand-new businesses with limited credit history to secure a business loan, either from a bank or from an alternative lender.

Your financing options aren’t limited to your own purse strings (or your friends’ and family’s). Here are a few other ways to get funding and loans for a child care business:

SBA microloan

Although most SBA loans are available only to businesses with a few years of experience under their belts, SBA microloans are actually designed to help startups get off the ground. They’re especially accessible to women, veterans, minorities and business owners in low-income areas. And unlike most other SBA loan programs, SBA microloans are disbursed by nonprofit lenders, rather than banks.

As the name suggests, SBA microloans tend to be on the smaller side, with amounts capped at $50,000, but they may be as low as $500. (For more context, the average microloan amount was $14,000 in 2017.) And because microloans are designed for new businesses, business owners with average or even challenged credit may still be accepted, as long as other aspects of their SBA loan applications are in good shape.

SBA community advantage

These loans from the SBA have all of the advantages that come with SBA microloans but the community advantage loans are specifically for businesses that are serving traditionally underserved communities. These loans are generally for a higher dollar amount than the microloans and can go a bit further for your business.

Government grants

You might be able to obtain financial assistance to start and run your day care through state or federal funding programs for early childhood education providers. For instance, you can contact your state’s Child Care and Development Fund Plan to look into startup funds, or your state’s school meal contacts to seek funding for your day care center’s meals.

Take a look at the Administration for Children and Families Office of Child Care’s list for a more comprehensive overview of federal and state financing programs for child care centers .

Business credit card

It’s important to use a business credit card to keep your day care’s expenses separate from your own. Of course, using a credit card is also the most convenient way to pay for your daily expenses. And since credit limits for business credit cards tend to exceed those of consumer cards, you can spend more liberally without worrying about maxing out your card.

Another bonus? Using your business card responsibly (by which we mostly mean paying off your balance in full and on time, every month) can help you build business credit. And with a healthy business credit score, you’re in a better position to secure business loans with great terms down the line.

If you opt for a card with a long 0% intro APR period, you can essentially use that introductory grace period as an interest-free loan. Look into the American Express Blue Business Plus card, which, at 12 months, carries one of the longest interest-free introductory periods in a business credit card right now.

After your 12 interest-free months are up, though, a variable APR kicks in at a rate depending on your creditworthiness and the market. Check the issuer's terms and conditions for the latest APR information.

8. Hire staff

You may be planning on running your day care facility solo, but depending on your state and the number of children you’re looking after, that might not be an option — every state sets a required ratio of staff to children to ensure that every child receives adequate care. They also dictate the maximum number of children permitted in a group.

Adult-to-child ratios and class sizes depend on the age of the children, but they might also depend on the size of the day care facility, or face further restrictions based on municipality. For a day care center in New York state, for example, the state requires one adult for six children under school age. However, in New York City, there must be two teachers or one teacher and one assistant to every six children aged 2 to 3, with a maximum of 12 students allowed in a single group. Your own children may or may not be included in that count, too.

So, while hiring really depends upon your state’s requirements, it makes sense to leave room for hiring staff in your business budget. That way, you’ll be prepared for growth, without worrying about your operation shutting down because you’re not properly prepared for it. (Just keep in mind that any staff you hire needs to be appropriately licensed or trained for it, and potentially undergo a background check.)

Start Your Dream Business

9. Write your day care contract and policies

To further legally protect your business, it’s crucial that you draw up a contract, write out your day care policies, and require that potential clients (or, more likely, the parents of potential clients) review and sign both documents before accepting their patronage.

If you're just starting to read up on how to start a day care business, you might not be clear on the distinction between these two documents. To clarify, your contract is the document stating that you’ll provide child care, be compensated for providing care according to the payment terms you specify, and have the right to terminate providing care.

Your policies, on the other hand, provide parents with important logistical information regarding how you’ll run your day care center. There, you can outline protocol regarding vacation, illness, inclement weather, drop-off and pickup times, curriculum, field trips, and anything else you believe is important for your clients to understand and agree to about your day care center.

On a similar note...

Upmetrics AI Assistant: Simplifying Business Planning through AI-Powered Insights. Learn How

• AI ASSISTANTS

Upmetrics AI Your go-to AI-powered business assistant

AI Writing Assist Write, translate, and refine your text with AI

AI Financial Assist Automated forecasts and AI recommendations

• TOP FEATURES

AI Business Plan Generator Create business plans faster with AI

Financial Forecasting Make accurate financial forecasts faster

Strategic Planning Develop actionable strategic plans on-the-go

AI Pitch Deck Generator Use AI to generate your investor deck

See how it works  →

AI-powered business planning software

Very useful business plan software connected to AI. Saved a lot of time, money and energy. Their team is highly skilled and always here to help.

- Julien López

• BY USE CASE

Starting & Launching a Business Plan your business for launch and success

Validate Your Business Idea Discover the potential of your business idea

Secure Funding, Loans, Grants Create plans that get you funded

Business Consultant & Advisors Plan seamlessly with your team members and clients

Business Schools & Educators Simplify business plan education for students

Students & Learners Your e-tutor for business planning

• Sample Plans
• WHY UPMETRICS?

Reviews See why customers love Upmetrics

Customer Success Stories Read our customer success stories

Blogs Latest business planning tips and strategies

Strategic Planning Templates Ready-to-use strategic plan templates

Business Plan Course A step-by-step business planning course

Ebooks & Guides A free resource hub on business planning

Business Tools Free business tools to help you grow

• Sample Business Plans
• Education & Training

Daycare Business Plan

With the majority of parents staying out of the home throughout the day, the daycare (childcare) business has turned into an extremely bankable one in recent years.

If you have the right resources and more importantly, are good with children. If you have ever dreamt of starting a daycare business , then you are at the right place!

Though certain sections are common to all business plans, you’ll need to customize the outline as per the needs and requirements of your business.

Industry Overview

The U.S. childcare market size was valued at USD 54.3 billion in 2019 and is expected to expand at a compound annual growth rate (CAGR) of 3.9% from 2020 to 2027.

This rise in demand has come from the increasing number of working parents. Earlier parents had to quit their careers to take care of their children, but that has changed due to better daycare facilities.

Now, if you plan on entering this competitive childcare market, you must know that the daycare business is based on the foundation of trust more than anything. Hence, providing quality services and having a clean image in the market is of utmost importance.

Studies show that a lot of daycare businesses fail in their first three years due to reasons ranging from poor management to lagging finances. You can combat all of these and many more troubles if you enter the industry with a well-rounded daycare business plan.

Say goodbye to boring templates

Build your business plan faster and easier with AI

Plans starting from $7/month

What is a Daycare Business Plan?

A daycare business plan is an equivalent of a roadmap in your business journey. A plan helps you understand what you’re getting yourself into.

It helps you understand the market, figure out where you stand in it, know your target audience better, and formulate better marketing and financial strategies.

Overall, it makes your decision-making process faster and more effective and prevents you from feeling clueless at any point in your business journey.

Moreover, it also helps you get investors and helps your employees and partners understand what your business stands for. It gives the people in your business a feeling that you have a vision and know what you are doing with your business.

Also, you get to set clear goals that give you a direction to work and put your efforts in.

Why is a Daycare Business Plan Important?

Everything you do for your business should add value to it. And here’s how a daycare business plan can add value to your business:

It gives you a sense of direction

There are several ways you can go with each business decision. A business plan helps you understand what would work best for your business then.

Also, it gives a set of tangible goals to look forward to when you work on your business.

It helps you understand your target audience better

Planning your business gives a better form and structure to your research. Which at the end of the day helps you understand your customers better. It also helps you analyze what it means for your business.

Making and upgrading your product or service for your customers serves the biggest purpose at the end of the day.

It helps you understand your competition better

Imagine there’s a popular daycare center in your city and several parents swear by it. Now, this could mean several things for your business.

You’ll have to pick a different location, know the daycare service’s weaknesses and offer better services by working on that area for your business.

You can also pick the things they are doing right, and inculcate the same in your strategies.

A business plan can help you do all of the above and more through a competitive analysis.

It helps you convince your investors

Though making the right prediction is difficult, having a rough idea of your business’s sales and financial potential is important to get investors on board.

Investors want to know the scalability of your business before they invest in it. A good and realistic prediction of returns makes it easier to convince investors.

And a business plan can help you make realistic financial predictions.

It keeps you updated with the latest business trends

A business plan is a living document that grows alongside your business. It also helps you have a foresight of changing trends and act on time for getting the best results for your business.

This also makes it important for you to keep updating your plan as your business grows.

What does a Daycare Business Plan Look Like?

If you are planning to start a new auto or car repair shop, the first thing you will need is a business plan. Use our sample Daycare Business Plan created using Upmetrics business plan software to start writing your business plan in no time.

Before you start writing your business plan for your new auto repairing shop, spend as much time as you can reading through some examples of Children’s & Pet business plans .

Moreover, business plans come in different forms to fit the current state of your business.

Apart from that, there are a few major sections that should be included in every business plan.

Daycare Business Plan Outline

This is the standard business plan outline which will cover all important sections that you should include in your business plan.

• Executive Summary
• Keys to Success
• Company Summary
• Timothy Bernard Kilpatrick
• Start-up Summary
• Locations and Facilities
• Service Description
• Competitive Comparison
• Sales Literature
• Fulfillment
• Future Services
• Industry Analysis
• Market Segmentation
• Market Analysis
• Market Needs
• Market Trends
• Market Growth
• Business Participants
• Competition and Buying Patterns
• Main Competitors
• Strategy and Implementation Summary
• Value Proposition
• Competitive Edge
• Positioning Statement
• Pricing Strategy
• Promotion Strategy
• Marketing Programs
• Sales Forecast
• Sales Programs
• Strategic Alliances
• Web Plan Summary
• Website Marketing Strategy
• Development Requirements
• Management Summary
• Organizational Structure
• Timothy B. Kilpatrick
• Carolyn Steverson
• Candice Harris
• Management Team Gaps
• Personnel Plan
• Projected Profit and Loss
• Projected Cash Flow
• Projected Balance Sheet

What to Include in Your Daycare Business Plan?

A good daycare business plan consists of a certain number of well-defined sections, the following sections can help you in writing an excellent business plan.

1. Executive Summary

The executive summary section is one of the most important sections of your business plan because it not only forms the first section of your business plan but also acts as a pitch for potential investors who can provide you with funds for your daycare business.

It consists of your company’s vision and mission, its USP, objectives, and also expected revenues.

Writing the executive summary section of your plan at the very end, so you can sum up your plan properly is a good tip to remember.

2. Services

In this section, you should give out a clear idea of what your services are and whom it caters to. You should define your target market, your niche, the area your services will be extended to, etc.

As a daycare center, you should have a clear idea of the age group you will cater to, what is the preferred location of your target audience, how you come off as a service to your customers, and so on.

3. Market Analysis

Market analysis can be of great help to any business, it can help you understand what you are getting yourself into, who your competitors are, what your client base expects out of you, and where you stand in the current market situation.

Hence, market analysis immensely improves your understanding of the industry you are getting into. In the case of a daycare center knowing the best practices of childcare that exist in the market can be of great help.

4. Web Plan

In today’s internet-based world, most busy parents looking for a daycare center online. Hence, having a strong and reliable web presence is crucial to the success of your daycare business. Thus, including a web strategy in your business plan is necessary.

Always remember, as a daycare service coming off as a trustworthy and reliable institution is crucial for your business to work.

5. Management and Organizational Structure

Having a well-structured management system is especially crucial for a daycare service. It not only helps your business run smoother, but it also makes you look more responsible and reliable in front of the parents or the primary caregivers.

In this section, you should include the structure of your organization, details about people on various levels in your company, a solid system for tracking everyone’s work and progress, the areas your team is excelling at, and the areas your team is lagging in.

6. Financial Plan

One of the chief reasons for several daycare services running out of business is poorly managed finances or running out of funds to keep going.

Planning your finances in the early stages of your business saves you from encountering such a problem later on.

Hence, planning your finances is mandatory while writing a business plan.

Download a sample daycare business plan

Need help writing your business plan from scratch? Here you go;  download our free daycare business plan pdf  to start.

It’s a modern business plan template specifically designed for your daycare business. Use the example business plan as a guide for writing your own.

The Quickest Way to turn a Business Idea into a Business Plan

Fill-in-the-blanks and automatic financials make it easy.

Daycare Business Plan Summary

In conclusion, apart from having a good image as an organization, a well-managed team, a clearly defined niche, thorough research of the market and an excellent financial plan is crucial to the success of a daycare business.

After getting started with Upmetrics , you can copy this sample daycare business plan into your business plan and modify the required information and download your daycare business plan pdf or doc file.

It’s the fastest and easiest way to start writing your business plan.

Related Posts

School Business Plan

Daycare Financial Plan

After-School Program Business Plan

Swim School Business Plan

Key Components of a Business Plan

Business Plan Outline Creation Process

About the Author

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

Plan your business in the shortest time possible

No Risk – Cancel at Any Time – 15 Day Money Back Guarantee

Popular Templates

Create a great Business Plan with great price.

• 400+ Business plan templates & examples
• AI Assistance & step by step guidance
• 4.8 Star rating on Trustpilot

Streamline your business planning process with Upmetrics .

How to Start a Daycare Business Plan 

A Step-by-Step Guide for Childcare Planning with Tips to Help Entrepreneurs Start Their Daycare Business

Table of contents

What is daycare and why should i start one.

• Types of Daycare Providers
• Before Starting Your Daycare Business Essential Planning Steps
• Decision Journey Map Definitions

Assess the Competition

How to start your daycare business.

• The Importance of an Execution Plan
• Execution Plan: Marketing and Sales
• Form Your Daycare Business

Get Familiar with Daycare Licensing Requirements

• Choose Your Insurance and Liability 
• How to Gain Enrollment at Your Daycare  
• Invest In Childcare Experience Software to Build Your Daycare with Less Work

Build an Expert-Level Business Plan for Daycare

The childcare industry is full of passionate, hard-working individuals. Entrepreneurs just like you are starting a daycare from the ground up. In this guide, we'll give you guidance and provide templates to build a solid daycare business plan.

According to Forbes , daycare businesses were projected to have some of the fastest employment growth of all industries through 2020. Starting a daycare is a great opportunity for aspiring business owners who have a passion for early childhood education and child development.   

‘Daycare’ is an umbrella term for various childcare options (such as Montessori, head start programs, preschool, and many more) where parents and guardians drop their children off and leave them in your care to...  

• Socialize with other children in their age group  
• Learn basic fundamentals for future academic success  
• Reach important developmental milestones

Is Starting a Daycare Business Worth It?

Starting a childcare business or franchise is profitable, emotionally rewarding, and sustainable – the need for committed childcare entrepreneurs has never been greater.   

As of 2021, there were 856,238 childcare centers in the United States. The growing popularity of childcare centers comes from the demand. Parents will always need a form of care for their kids. Plus, there’s a necessity, especially beyond COVID-19, to socialize children in an environment that fosters development.  

Types of Daycare Providers 

• In-home daycare  
• Relative care  
• Preschool  
• Independently-owned daycare
• Daycare franchises  

The Difference Between Individual Centers and Franchises  

An independently-owned daycare often has an individual owner, a center director, and possibly a few other administrative staff members – along with teachers, cooks, bus drivers, etc. The owner is typically an individual who puts their own money and savings into opening the daycare, so all business rights (name, branding, etc.) belong to them.  

Alternatively, a daycare franchise falls under a corporate brand that has made an agreement with an individual to legally establish a business – using the company’s brand or trademark. In this scenario, the franchisee usually pays an initial fee, as well as ongoing royalties to the corporate franchisor. In return, the franchisee gains the use of a trademark, support from the franchisor, and the right to use the franchisor's system of doing business (including unique business policies and procedures, such as their method for advertising or enrollment). This model can be particularly beneficial for individuals who are passionate about early childhood education but don’t know how to get started on their own.  

For example, Kids R Kids and Kiddie Academy are both successful daycare business plans in the United States. Each center operates similarly, has the same name (aside from a unique location number or city/county name), and the same branding as all locations fall under the franchisee umbrella.  

Daycare Franchise Terms

• A franchisor is a daycare company that provides its services, brand, and business operations to the individual. This may also be known as a ‘ franchise system ’.  
• A franchisee is an individual owner that is being supported by the company (franchisor). Buying into a daycare franchise makes you the franchisee.  
• The franchise refers to the legal agreement between the company and the franchisee.  
• The franchise disclosure document is the legally binding contract between the company and the individual.  

Essential Planning Steps Before Starting Your Daycare Business

1) conduct market research.

When it comes to starting your childcare center, relying on assumptions about your customers and competitors leads to wasted time, money, and effort. In contrast, businesses that conduct regular market research improve customer retention and are 76% more likely to see an increase in revenue.  

Market research is a data collection process that evaluates both consumer behavior, competitor habits, and industry trends to determine the viability of your center and build a foundation for future business operations.  

Prepare for success upfront by conducting thorough market research to understand your competition, improve communication with your target audience, and identify new market opportunities. This research should result in actual data that you can use to drive your business and marketing strategies as you launch your center.  

There are a variety of tools available to help you conduct market research - all from the comfort of your own office. Gone are the days of hiring team members with clipboards to approach consumers face-to-face. Survey Monkey, Attest, and Sprinklr all offer digital market research tools to help guide you through the process of understanding your audience, your competitors, and your industry.  

2) Determine Your Target Market

A market segment is a group of consumers that could potentially enroll at your childcare center. First, identify your daycare target market segments and determine how big each segment is.  

Be careful not to fall into the trap of defining your market as “everyone in your community.” This often leads to a ‘spray and pray’ approach to your marketing and as we know, a message for everyone really speaks to no one. When you generalize your advertising in favor of not isolating a potential consumer, you aren’t able to effectively communicate with your ideal customers – forgetting to recognize how your childcare center can appeal to them and their needs.  

A classic example is a shoe manufacturer. While it would be tempting for a shoe company to say that their target market is anyone who has feet, realistically they need to target a specific segment of the market in order to be successful. If they sell adult athletic shoes, they should be building their message to target athletes or individuals who enjoy staying active and exercising. Likewise, if you offer programs for children aged 6 months to 4 years old, you should prioritize advertising toward young adults in their 20s and 30s.  

A common strategy when identifying target markets is to use the TAM, SAM, and SOM approaches to look at market sizes from a top-down approach as well as a bottom-up approach.

Target Market Terms

This should include everyone you wish to reach.  

Example: Your entire local community.  

SAM: Your Segmented Addressable Market or Served Available Market 

This is a portion of the TAM you will specifically target because they align with your offerings.  

Example: Families with young children.  

SOM: Your Share of the Market 

This is the group of your SAM that you will realistically reach—particularly in the first few years of your center’s opening, as you may expand and grow your service over time.  

Example: Families with young children who make at least $65,000 each year in household income.  

For childcare organizations with multiple brands, schools, or programs - increasing revenue and keeping families happy is vital for growth. Your Millennial parents need a uniform, high-quality experience, regardless of location.

Standardizing business processes has a significant impact on time savings, costs, and most notably quality. In fact, standardization improves quality by   61.9% ,  on average. Create consistent  enrollment processes across all your franchise locations to ensure every family has a great experience and a positive association with your brand – leading to higher conversion success and profitability.   

To achieve consistency, your franchisees’ marketing approach and advertising material must follow all your corporate brand guidelines. Your organization should have a lead management system that supports your childcare franchise staff as they  guide families through   the decision-making journey  while also ensuring each location is delivering a consistent parent experience.  

3) Develop Your Buyer Personas

Before you begin writing your daycare marketing plan, make sure you’ve defined your market and buyer personas. Without a deep understanding of whom you’re speaking to, a daycare marketing plan will have little value.    

Audience personas allow you to dive even deeper into your target market and help you understand more than just who your customer is. These identities inform you how to communicate with your customers in a way that relates to their pain points and needs.  

Building a daycare business plan is no joke! Check out childcare business tips at a glance . 

When you understand your customer’s motivations, you can uniquely address their concerns and questions in your marketing materials - leading to increased tours, enrollments, and revenue.   

Start by listing out the various kinds of programs and classes you’d like to offer at your center.  

Then, determine who the primary decision-maker is and who the primary influencers might be in each scenario.   

Primary decision-maker : typically the individual(s) taking financial responsibility and remitting payment at your center.   

Primary influencers : are  also crucial in the purchasing process as they often have the ability to sway decision-makers.  

For example, imagine you’re promoting availability for Summer camp programs at your center. In this instance, the primary decision-maker might be the parent(s) or guardian(s) whereas the primary influencer would likely be the child who’s deciding what kind of activities they want to do this Summer.  

Audience Overview

List the audiences, personas, or segments that you want your center’s marketing and messaging efforts to reach.  

Select one audience from above and describe it to the best of your knowledge. Go beyond the traditional persona to consider motivations & behavior.  

Identify the key stages in your audience’s enrollment journey from beginning to end, knowing there may be multi-dimensional steps within a stage. Complete the table for each journey at the individual stages from the specific audience’s point of view.  

Decision Journey Map Terms & Definitions 

Stage : This refers to each stage of the enrollment journey - awareness, consideration, action, and advocacy.  

Awareness : This is when a family is first learning of your center and your brand. They are researching multiple daycare centers and eventually send an inquiry to tour your facility or learn more.   

Consideration : During this stage, a family is touring your center and may be deciding between you and 1-2 other providers. Tip: Proactively equip your staff with key talking points so they can highlight your unique center features.  

Action : This is when a parent decides to register their child for care, pay fees, and is either placed on your waitlist or enrolls.  

Advocacy : After a successful, happy experience, this parent or guardian has become an advocate for your business. They’re telling friends and family about your center. This is vital for your word-of-mouth marketing strategy.  

Emotion : Identify what the persona is feeling at each stage of the customer’s journey. They may be anxious, curious, excited, or satisfied at various points. Put yourself in their shoes.  

Key Actions : What actions would a consumer take at each stage? For example, during the awareness stage, they may see your ad on Facebook, look you up on Google, or visit your website. In the consideration stage, they may call your center to get more information, look at your services online, or read reviews.  

Questions : What questions is the consumer asking in each stage? These are the questions you need to be answering for them in your advertising and marketing efforts.  

Competitive research helps you understand why customers choose your center over other alternative care options. This information provides you with insight into how your competition is marketing their services and over time, this can help you improve your own marketing campaigns and business offerings.  

Look up similar daycare centers in your area, and see what programs they offer, the type of facilities, their capacity, and their curriculum. Then, highlight the features that make your center stand out. Showcase your selling points in all marketing and advertising efforts.  Get started with these key questions...

• Who are my direct competitors and what do they offer?
• Who are my indirect competitors
• What does my competition's pricing look like?
• Do they offer promotional pricing or payment plans?
• What do they do best?
• What do they do poorly?

Download the guide to stay up to date on the latest industry news, trends and best practices for growing and managing your childcare business.

Download the Guide

Build a Daycare Business Plan

A good business plan will guide you through each stage of starting and managing your childcare organization- including how to structure, run, and grow your new business.  

There’s no correct or incorrect way to write your business plan. What’s most important is that you identify your business objectives and use this document as a roadmap for how to achieve these goals.  

A strong business plan can help you recruit business investors, gain funding, or find new partners. Prospective investors want to feel confident they’ll see a return on their investment and your center’s business plan is the perfect tool to assure potentials that working with you — or investing in your business— is a smart and profitable decision.  

Write a Day Care Executive Summary (Daycare Business Plan Outline)

Although this section is the first thing people will read, it’s advised that you write it last, once you know the details of your business inside and out. At this stage, you will be able to articulate your business more clearly and summarize all the information in a succinct, concise manner.  

Ideally, your executive summary will be able to act as a stand-alone document that covers the key highlights of your detailed business plan. In fact, it’s common for investors or loan providers to ask for just the executive summary when they start evaluating your business. If they like what they see in the executive summary, they’ll often follow up with a request for a complete plan, a pitch presentation, and more in-depth daycare business plan financials.  

As your executive summary is such a critical component of your business plan, you’ll want to make sure that it’s as clear and concise as possible. Cover only the essential components of your daycare, ensuring your executive summary is one to two pages maximum. This section is intended to be a quick read that hooks your potential investors’ interest and excites them to learn more.  

The executive summary is a tell-all first paragraph that details...  

• The city and state of your center (you can decide on the exact location later)  
• A potential open date  
• A projected enrollment count (number of full-time enrollments)  
• Programs you plan to offer  
• Ages you hope to serve  
• A quick financial summary (based on grants, funding, and potential revenue from projected enrollments)

This may seem like a lot of information upfront, but it’s simply a high-level overview of your plan.   

Conduct an Opportunity Analysis 

The opportunity section of your business plan includes information about:  

• The problem that you’re solving within your community
• P rograms and classrooms   do you plan to market your center(s) to
• How your daycare facility fits into the existing competitive landscape  

Opportunity Analysis: An Example 

The opportunity analysis portion of your business plan is important for outlining what distinguishes your daycare from your direct and indirect competitors. It details how you can continue to expand and grow your center in the future.  

Use your previous competitive research to determine your daycare business’s competitive advantage and position. Analyze potential strengths, weaknesses, opportunities, and threats. 

Problem and Solution

Describe the problem that you are solving for your customers. Childcare centers are need-oriented, meaning your consumers have tangible pain points that you must resolve to be successful.   

So, what is the primary pain point for them? Maybe it’s that busy, working parents need a caring, safe place for their child during the day, or perhaps families are seeking after-school care options for their elementary-aged children, or maybe parents need 24-hour childcare options when they’re traveling or working odd hours.   

Now, assess how they are solving their problems currently and where there’s room for improvement. If there's only one childcare center in your community and it has no open seats, you could be the solution. Or maybe there are lots of existing care providers in your city but they’re expensive or have rigid pickup and drop-off times that working parents have trouble meeting. Or perhaps there aren’t any existing childcare businesses within a reasonable driving distance of where you’d like to place yours.  

Defining the problem you are solving for your customers is by far the most critical element of your business plan and is crucial for your daycare business’ success. If you can’t pinpoint a problem that your potential customers have, then you might not have a viable business concept.  

To ensure that you are solving a real problem, try conducting your own survey with potential customers to get a better understanding of their needs and validate that they have the problem you assume they have. Then, take the next step and pitch your potential solution to their problem.

Do they agree that it’s a good fit or does it seem to fall flat?  See how to come up with a strategic plan for your business.

The Importance of Creating an Execution Plan

The execution chapter outlines how you’re actually going to make your childcare center work . You’l l address your marketing and enrollment plans, operations, success metrics, and any key milestones that you expect to achieve.  

Execution Plan: Marketing and Sales  

The marketing and sales plan section of your business plan details how you propose to reach your target market segments, how you plan on converting those target markets, what your pricing model looks like, and what partnerships you may need to make your center a success.   

Your Positioning Statement

Once you understand your audience, the first part of your marketing and sales plan is your positioning statement. Refer back to your value proposition to create a simple, straightforward sentiment, explaining where your company sits within the competitive landscape and what differentiates your venue from the alternatives that a customer might consider. This statement should be written for an investor or loan provider, rather than for your customer.  

One daycare business plan example - a positioning statement for a 24-hour childcare center in Austin, Texas may look like this:

“For the Austin-based family who is seeking childcare around the clock, Jenny’s 24-Hour Daycare is a safe option for young children with nutritional meals, best-in-industry sleeping arrangements, a clean outdoor play area, and highly trained care professionals. Jenny’s 24-Hour Daycare is the first center of its kind within 30 miles of the Austin metroplex and offers competitive pricing and tuition payment plans.”  

Use this formula to develop a positioning statement for your center: 

Your Mission Statement

Your mission statement is a scaled-down version of your positioning statement. This should be just one or two sentences that are geared toward your target consumer and describe what your business plans to accomplish. This statement usually includes company core values that explain your daycare’s purpose and how you serve your audience.  

For example, Cadence Education is a leading early childhood education provider with the mission of “providing parents with peace of mind by giving children an exceptional education every fun-filled day in a place as nurturing as a home .”  

Pricing 

Your positioning strategy will typically determine how you price your memberships and packages. There are some basic rules that you should follow when deciding on your price point:  

• Cost-plus pricing : For the most part, you should be charging your customers more than it costs you to host them at your center to ensure your venue is profitable and appealing to investors.  
• Market-based pricing : Look at what your competitors are charging and then price based on what your audience is expecting.  

Strategic Alliances

As part of your marketing plan, you may wish to collaborate with other organizations such as local camps, after-school programs, pediatricians, or even other childcare centers that don’t offer the same activities that you do.   

This partnership should benefit both of you – it may help provide access to a target market segment for your venue while allowing your partner to offer a helpful recommendation to their customers. If you’ve already established an alliance, it’s important to detail that in your business plan.  

The operations section is all about how your business works. This portion details the essential logistics such as staffing and sourcing and fulfillment. But remember, your goal is to keep your business plan as short as possible, so too much detail here could easily make your plan much too long.  

Milestones and Metrics

It’s critical that you take the time to look forward and schedule the next critical steps for your business. Investors will want to see that you understand what needs to happen to make your plans a reality and that you are working on a realistic schedule.

Then, determine how you will measure the success of each milestone by listing out the key performance indicators and metrics needed to see progress. These will be the numbers you monitor on a regular basis to evaluate the trajectory of your business. For example, you may look at how many families tour your center each week, how many children you enroll each month, or the amount of revenue you bring in per quarter.  

Company and Management Summary

The structure of your staff and teams sets your daycare up for success. In a new daycare center, there’s typically an owner (or franchisee), a center director, staff members, an enrollment or marketing team, accounting/administration, teachers, assistants, cooks, bus drivers, and janitorial staff. For example, the average small daycare business plan includes 8-10 fully licensed and/or certified early education teachers.

Financial Forecasts  

A typical financial plan will have monthly sales and revenue forecasts for the first 12 months, and then annual projections for the remaining three to five years. Break your sales forecast down into several rows, focusing on just high-level buckets at this point.   

Knowing how much your daycare will cost to open ahead of time can save you money, stress, and time. Daycare business plan start-up expenses vary by size, enrollment capacity, and miscellaneous needs.

Keep in mind that you can save on staffing costs and cut down on overhead with technology that helps to streamline your center’s operations. After all, 40% of Millennials prefer self-service over human contact when interacting with businesses.   

It’s essential that you find ways to enable families to book tours and enroll online without ever having to make a phone call to the center- reducing time spent on necessary-but-manual tasks for both your staff and inquiring families.  

Finally, articulate your profits and losses based on the data from your sales forecast and your personnel plan plus a list of all your other ongoing expenses associated with running your childcare center.  

See this Formula for Financial Forecasts

Step 1 : Average cost of tuition per child x your expected enrollments x 12 (annual revenue – assuming each family enrolls their child in one of your summer programs).  

Step 2 : Daycare businesses make around 16% profit from their overall revenue, after daycare expenses. Multiply your number from step 1 by .16 to get your predicted profit.   

Example : Let’s say you plan to charge families an average of $315 per week for childcare. With that, your goal is to enroll 60 students by the time your daycare center opens. Multiply $315 x 60 x 12 (annual revenue). This should come out to $226,800. Lastly, multiply your revenue of $226,800 by .16, which equals a net profit of $36,288 per year.  

Consider Various Funding Sources

Depending on your situation, there’s both loan and grant funding in childcare. Between state tax credits, loans, and grants – there are financing options for a variety of situations.  

Review Your Tax Deduction Options

Collecting tax credits is one way to receive an annual deduction on daycare costs. Based on your state, you can claim tax credits for...  

Collect Daycare Grants for Your Business

Often, startup costs for opening a daycare are high. Certain states and counties offer grants for new daycare businesses. There are several grant options, depending on your child and family details.   

For example, there’s a Preschool Development Grant Program and a Head Start/Early Head Start grant to provide funding that expands early childhood centers and developmental programs.   

Know Which Loans Are Available to Daycare Business Owners

While grants are a wonderful option for freshly opened daycare businesses, loans are occasionally easier to come by. They’re offered widely and often have fewer requirements to qualify. Check out a few loan examples for your daycare center.   

• SBA Loans , otherwise known as Small Business Administration loans, have exceptional rates, low interest, and flexible repayment options.  
• SBA 7(a) Loans are beneficial for covering pricier equipment funds and real estate. Loans of up to $5 million are available to daycares.  
• SBA 504 Loans – these are wonderful for business expansions and involve a loan for 50% of the project cost.  

Take Actionable Steps to Bring Your Daycare Business to Life

Both Limited Liability Companies and Incorporations offer the significant legal advantage of helping to protect assets from creditors and provide an extra layer of protection against legal liability.  

The main difference between an LLC and a corporation is that an LLC is owned by one or more individuals, and a corporation is owned by its shareholders. In general, the creation and management of an LLC are considered simpler and more flexible than that of a corporation.  

Find the Right Vendors

Choosing the right suppliers for your business is essential. If your vendors aren’t reliable or don’t deliver quality products, your new center will struggle to attract families. As a childcare provider, you will likely need the following vendors at one point or another:  

• Electrician 
• Plumber  
• Food and Beverage Supplier 
• Educational Materials Supplier  
• Substitute Staffing Provider 
• Accountant  
• Childcare Licensing Consultant 
• Cleaning & Maintenance  
• Childcare Management System (CMS) 
• Customer Relationship Management (CRM) Software  
• Digital Payments Provider 
• Online Forms Software  
• Childcare Experience Software  

All states have different daycare licensing requirements. Generally, you'll follow the steps below.

1) Take a Course

Attend and complete a pre-application course (you’ll receive a certificate at the end – remember to save it).  

2) Submit Your Application

Submit your online licensing application. It'll ask for details about your business that were outlined in the executive summary.

3) Pay Fees

Pay your application fees. The fee depends on your center's capacity or the number of children you plan to enroll.

4) Complete Inspections

An inspection of your business property must be conducted.

5) Submit Your Service Payment

Register and pay for the inspection.

6) Conduct Background Checks

Submit background checks (this may also be an additional charge).

For More Information on How to Operate In Licensing Excellence, Listen to the Podcast Below

Choose Your Insurance and Liability

• Provide general liability – stay covered if your center has any property damage or injuries to third parties (children).  
• Abuse coverage protects your childcare business or franchise. If employees turn out to be abusive towards children, this policy covers defense costs and defends you against financial losses.  
• Professional liability insurance provides coverage for your business and workers if there is a neglect claim.  
• Hired and non-owned auto liability ensures everyone is covered if there is a pick-up/drop-off vehicle accident.  

*Liability requirements may vary by state.

How to Gain Enrollment at Your Daycare

From a business owner's perspective, the next step after successfully starting your daycare is to grow your center and gain enrollments.   

Begin by building a strong company culture, actively marketing your daycare center, and finding the right childcare technology to optimize your enrollment process and save time.  

See how to elevate your business plan for daycare with better waitlist management.

Create a Culture Where Staff Want to Work

A daycare center that stands out from the rest has happy staff members that want to work hard. Create a diverse employee culture that feels comfortable openly talking about situations. Provide support, patience, and room for growth. See more tips for creating a healthy and positive culture for your daycare staff .  

Market Your Center

A daycare marketing strategy starts with an achievable goal. Do you want to fill your enrollment spots? Do you want to build a waitlist? Should you focus on scheduling more tours or gaining new leads ?   

Choose a goal with measurable results. That way, you can track and analyze your marketing performance. When it comes to how to promote daycare business, marketing helps families realize you're the best childcare center on the block. Promote your centers through...

• Social media (especially Facebook – 83% of Millennials have a Facebook account).  
• Landing pages and contact forms on your website  
• Listing directories  
• Email and text marketing campaigns  
• Referrals  
• Digital advertisements  
• Flyers  
• Word-of-mouth marketing  

Tip: childcare experience software that automates the reports you need helps you to save time and improve your return on investment (ROI).  For example, a  Source of Families report shows you where your leads are coming from to optimize your efforts.

Invest In Childcare Experience Software to Build Your Daycare with Less Work  

LineLeader is revolutionary childcare software that automates lead capture, follow-up, scheduling tours, and reports. Craft  beautiful, personalized marketing campaigns to continually grow your business.  Plus, easily manage your curriculum, attendance, and billing with automated center management

Get more from your marketing while saving franchisees 10 hours every week with LineLeader. Automate everything from lead capture and reporting to center management—all from one place.

Download Your Guide

Resources to help you run your childcare business.

How to Celebrate National Teacher Appreciation Week

5 Easy Ways to Celebrate Cinco de Mayo with Children

[Press] LineLeader Celebrates Week of the Young Child by Honoring Early...

Additional resources.

For more information on specific childcare resources regarding marketing tools, campaigns, tips, and best practices - see below.

1. Learn hidden secrets no one tells you about starting a childcare business .

2. See how to operate in childcare licensing excellence to boost enrollment.

3. Beth Fiori of Tiny Treasures provides expert tips. check out ways to improve your business plan for daycare with enhanced waitlist management.

4. Discover tips to maintain the best childcare center on the block.

5. Gain advice for strengthening your daycare staff culture. 

6. Learn the benefits of building a daycare business plan , at a glance. 

LineLeader Video Resources

The Ultimate Guide on How to Start a Daycare Center

• brightwheel
• Running a business

For children, daycare centers are a jumpstart to healthy growth and development. For you, they could be the key to financial freedom and a rewarding career. 

Opening a daycare center is not as easy as ABC, 1-2-3. There are several components to consider like your location, the overall economy, operating costs, licensing, insurance coverage, and more.

This ultimate guide has everything you need to know about opening a daycare center and the nine steps you can take to start your business.

Daycare centers in the current economy

The daycare industry has always been essential. However, the COVID-19 pandemic did have a negative impact on many childcare programs. 

To cooperate with social distancing regulations, USA Today reported that more than 2 in 3 of the United States’ formal childcare centers were closed or operating at reduced capacity. In addition, many families lost the need for childcare when many corporate jobs shifted to remote work. 

Additionally, daycare centers continue to battle against inflation affecting the costs of rent, utilities, food, supplies, staff salaries, and tuition. And while this might all seem daunting, the childcare industry is on the rise again.

With the reduction of COVID-19 regulations, parents have returned to their offices, and the need for childcare has returned. The U.S. Bureau of Labor Statistics reports that the job growth outlook for childcare workers between 2022 to 2032 is projected to decline 2% however, it is projected that there will be 153,000 openings for childcare workers each year, on average, over the decade. And while the economy can quickly bring about the downside of any industry, there are many benefits associated with opening a daycare center to consider.

The benefits of opening a daycare center

The significant benefits of opening a daycare center include personal childcare, financial freedom, tax benefits, and a rewarding career.

Personal childcare

When parents of young children go to work, they have to consider child care. Who will watch their child? How much will it cost? Will they be available to drop them off and pick them up? Opening a daycare center eliminates these questions for you. Starting a daycare business could lead to increased financial freedom if you already provide at-home care for your own children. 

Financial freedom

Most workers in the corporate world rely on their supervisors and managers for a paycheck. Opening a daycare center gives you financial freedom and autonomy over your income. Owning your own business also allows you to make decisions to propel the business and ensure your financial security.

Tax benefits

Opening a daycare provides tax benefits that save you money. For example, as a business owner, you can write off certain daycare expenses, including your utility bills, vehicle, and childcare supplies. 

Opening an in-home daycare may also allow you to write off a portion of your housing payment as a business expense when you file taxes.

Rewarding career

There is no doubt that many daycare owners and workers find their job of teaching, helping, and encouraging children rewarding. Daycare is essential to young children's cognitive, physical, and social-emotional development. Teachers have a direct hand in shaping their minds and behavior.

Before opening a daycare, ask yourself why you want to start a daycare. For example, are you passionate about fostering young children's development? Do you want to help families in your community? Reflecting on the reasons why you want to start a daycare will motivate you through the process and help your business succeed.

How much does it cost to start a daycare?

Before we outline the steps to starting your daycare center, you might find it beneficial to understand the financial obligation you’ll be making. The average cost to start and run a daycare business is about $50,000. The typical range is between $10,000 and $100,000 , depending on various factors like location, size of daycare, number of children, and staff.

Overall, home-based daycares usually has less start-up costs since you don't need to find a facility. On the other hand, medium to large-sized daycares can cost upward of $50,000, and the largest daycare centers can cost upward of $100,000, depending on your location. The typical operating costs of running a daycare center include:

Rent and utilities

You may opt to operate a home-based daycare center, which may cost less to operate than renting a commercial space. Most commercial spaces charge between $0.60 and $2.50 per square foot. Utilities may include electricity, water, heating, TV, phone, and internet.

Employee compensation

Hiring teaching and non-teaching staff is crucial if you plan to run a daycare. According to data from Salary.com as of September, 2023, childcare workers in the U.S. earn an average salary range of $34,500 to $43,000 per year. However, this range may differ based on your location as well as the employee's education, certifications, and years of experience.

Licensing fees

Daycare business licensing requirements and fees vary from one state to another. You should inquire with your state's early childhood education department to determine what licenses will be required for your business.

Insurance costs can range between $3,000 and $5,000 a year, depending on your specific policy and location. You may have to buy the following insurance policies: liability policy, property policy, workers’ compensation insurance and errors and omissions insurance.

Supplies and equipment 

You will need plenty of educational supplies and various furniture and equipment at your daycare center. Typical costs range from $30,000 to $40,000. Indoor furniture and equipment such as cribs, tables, changing stations, mats, chairs, computers, and outdoor furniture like playground equipment is essential for your center. Educational supplies like age-appropriate toys, books, and craft supplies, and housekeeping supplies such as cleaning supplies, diapers, and wipes should also be included in your budget.

If your center provides meals, you will also need to budget for the cost of food and other kitchen equipment and supplies like plates, cups, and napkins. The USDA website provides information on Child and Adult Care Food Program nutrition standards that most centers must abide by.

Advertising and marketing

Advertising and marketing are crucial for new and established daycare businesses. The total advertising and marketing costs can range between $1,000 and $1,500. These expenses typically include things like printed flyers or other marketing materials, website costs, or ads on social media.

When opening a daycare, use this information to estimate your daycare’s monthly budget and expenses.

How to start a daycare in 9 steps

Opening a daycare requires careful preparation. Follow these steps carefully in accordance with your local and state guidelines to keep your business compliant and help your daycare run smoothly.

1. Learn about daycare licensing requirements 

Daycare businesses often start small. You might transition from babysitting and nannying to owning your own childcare business. Making that transition requires you to be compliant with local and state regulations. 

To comply with your state's specific rules and regulations, check out Child Care Aware of America’s licensing guidelines for childcare and daycare providers. This resource allows you to research the requirements in your specific state and city. 

If the information for your state is unavailable, contact your state’s Department of Children and Family Services (DCFS) or equivalent agency. While the requirements will vary across the country, you typically need to meet specific education and training requirements to obtain a childcare license. 

For example, some states require that a childcare center director has a degree in child development or a related field, while others might require a Child Development Associate (CDA) credential or years of experience working with children. 

Your local Child Care Resource & Referral Agency (CCR&R) will play a significant role in the information you need. Use them as a resource to understand and remain compliant with all childcare regulations.

2. Write a daycare business plan

Writing a daycare business plan will provide a great advantage and guide you through the rest of the startup process. 

To start, decide on a name for your daycare as well as a mission statement. You'll also need to determine your marketing plan, organizational plan, staffing, operations, and budget.

Next, you will need to research the costs of successfully launching a profitable daycare business. Consider the financial aspect of your daycare startup: are you using your own money or seeking a small business loan? Have you looked into daycare grants ? 

Creating and setting financial goals is crucial to running a successful business. In business, everything costs money, so make realistic expectations and estimates.

For additional help, the U.S. Small Business Association provides detailed instructions on writing a general business plan.

3. Find a location for your daycare

Are you starting an in-home daycare ? Are you looking to rent an existing daycare center? Are you planning to start a daycare business from scratch with a new facility?

You’ll often hear the phrase “location, location, location” in real estate. Consider this when searching for your daycare facility location. Note that all families will likely have a preference on where to send their child. Some might choose a quiet suburb over a bustling city. A facility next to a highway might raise safety and security concerns for some families. Remember these factors when searching for a location that fits your business needs.

Additionally, check your city zoning laws and childcare licensing guidelines to ensure your daycare business location is compliant with all regulations.

4. Get insurance for your daycare business

Depending on the type and size of the daycare you're opening, you will need various insurance policies . 

Most states require that daycare facilities obtain a license from their state's Department of Health and Human Services (DHHS). Part of the licensing process includes getting liability insurance. Liability insurance protects you and your business if someone gets hurt on your property. It is essential when caring for other people’s children.

Other types of insurance that could be beneficial in running your business include workers’ compensation—if an employee is injured on the job—and commercial property insurance—if your daycare center or assets are damaged and need to be repaired or replaced.

Insurance can get complicated. Find out what coverage is required and check your local childcare provider licensing requirements for guidance.

5. Prepare your daycare facility

What do you need to open a daycare business? You'll need furniture and supplies if you're getting ready to open a daycare center. Use this list to guide you through your preparation.

Safety supplies:

• First aid kits
• Smoke detectors
• Carbon monoxide detectors
• Fire extinguishers
• Emergency preparedness kit
• Emergency plan

Cleaning supplies:

• Cleaning supplies (all-purpose cleaner, vacuum, rubber gloves, etc.)
• Bathroom supplies (sponges, bucket, mop, etc.)
• Hand sanitizer
• Sanitation plan

Furniture & equipment:

• Highchairs and/or boosters
• Nap mats and/or cribs
• Step stools
• Shelves and/or storage system

Play materials:

• Crib mobiles
• Stacking rings
• Nesting cups or boxes
• Large play vehicles
• Dolls and stuffed animals
• Musical instruments

Daycare technology:

• Attendance tracking
• Automated billing
• Daily event tracking and recording
• Digital check-in/check-out system

After getting the necessary supplies for your daycare facility, preparing the space also means ensuring it is childproofed. Having safety supplies and measures in place is an irreplaceable step, but you’ll need to take it further. Secure furniture and large appliances to the wall. Install covers on electrical outlets. Avoid keeping small items and toys around the facility to prevent choking.

When opening a daycare, the safety of the children comes first. So spend the time and use the proper resources to set up a safe, compliant daycare center.

6. Develop policies and procedures

Use childcare forms and templates to kick-start developing policies, procedures, and handbooks for your staff and families. 

Three important forms are daily report, staff evaluation, and enrollment forms. 

• Daily report forms allow the staff to communicate with the parents on their child's progress. 
• Staff evaluation forms help you monitor your employees' performance at your center and also provide an opportunity for you to support their professional development.
• Lastly, enrollment forms will typically be one of a parent's first interactions with your business. Carefully craft the messaging to demonstrate a welcoming, inclusive environment for families and their children.

As mentioned in the previous section, preparing your daycare facility also includes needing emergency and sanitation plans. You’ll want to develop a disaster or crisis management plan under the guidance of your local childcare licensing requirements. Your crisis management plan should include health, safety, privacy, and nutrition protocols.

7. Hire staff to help you run your daycare

A daycare center is only as good as its staff, so carefully consider your childcare hiring decisions.

Verify the daycare licensing requirements for staff ratios. The child-to-staff ratio ensures that all children receive adequate care, but depends on factors like the children's age and the daycare center's size. If you plan on running the daycare facility on your own, this will limit the number of children you can have in your facility. 

Additionally, you will need information on the licensing requirements for teachers’ educational backgrounds and other qualifications. Childcare staff may also be subject to criminal background checks and fingerprinting for further investigation. Therefore, verify references and education levels rigorously to avoid faux credentials.

8. Invest in childcare software

One of the best ways to start a successful daycare is to take advantage of the fantastic daycare technologies at your disposal. Streamlining your administrative tasks gives you more time to focus on providing families with a quality childcare experience. 

Brightwheel makes easy-to-use childcare software to help you manage your daycare and stay in touch with families. Your staff can use brightwheel to record and track daily events and activities , and parents can get real-time updates delivered to their mobile devices throughout the day.

Our powerful daycare app also offers secure, digital check-in/check-out and an automated paperless daycare billing system .

9. Market your daycare business and seek applicants

You'll need a marketing strategy for your childcare center that includes marketing collateral and an online presence. 

Here are some ideas to get the word out about your daycare:

• List your business in local childcare directories and participate in your community's daycare or preschool enrollment fairs. 
• Advertise through local businesses, parent groups, local events, and popular childcare blogs. 
• Try popular early education sites like Tinybeans and Winnie .
• Run a social media campaign focusing on your target population.
• Host a grand opening event to attract families. 

Once you’ve managed to fill your inaugural child roster, continue with ongoing marketing efforts so that you’ll always be building a customer base.

FAQs about starting a daycare center

Here are some frequently asked questions about starting a daycare center:

Can you open a daycare center from home?

Most states allow you to operate a daycare center from your home or private residence. Like commercial daycare centers, in-home daycare centers require a license from your state. The National Database of Child Care Licensing Regulations outlines each state's licensing policies and regulations. 

How much does it cost to get daycare licensing?

Daycare licensing fees vary from state to state, but they typically cost between $100 and $200. This cost does not include the expenses associated with any additional requirements like obtaining specific education, certification, or training requirements or making sure your facility or home is up to your state's standards.

How long does it take to get licensed?

The average time it takes to receive a daycare license varies by location but can take several months. However, this process can take longer if you lack the proper experience or documentation to fulfill your state’s requirements.

Are daycare centers profitable?

Your daycare center's profitability depends on many aspects of your business including your location, operating costs, tuition rates, and employee compensation. Generally, daycare centers in areas with higher costs of living can typically charge more for tuition. 

How much can you charge?

The average cost of center-based daycare in the United States is $10,000 - $12,000 per year. However, the price you charge for childcare will depend on numerous factors, including business location, local rates, average state tuition, and the child’s age. 

Your rates can also fluctuate based on what kind of child care you provide and whether you offer part-time, full-time, or after school care. 

How much does it cost to get insured?

The cost of business insurance varies based on the type of coverage policy. On average, you’ll pay the following premiums for business insurance:

• Business owner’s policy (BOP) = $84/month
• General liability insurance = $53/month
• Business property insurance = $63/month
• Professional liability insurance = $46/month
• Workers’ compensation = $86/month
• Small business health insurance = $623/month, single coverage

What makes a daycare attractive to families?

When choosing a daycare center, families look for high-quality childcare programs that have the below characteristics: 

• Small class sizes with low child-to-teacher ratios
• Qualified and well-trained childcare staff with low turnover
• Highly experienced childcare director
• A safe and hygienic learning environment with age-appropriate curriculum
• Adequate learning materials and resources and nutritious foods
• Active family engagement
• Accreditation by relevant education associations

Learn more about daycare licensing regulations in your state

Daycare licensing requirements vary by state. Consult with your state's childcare licensing department or check out our guides below for more information:

• Connecticut
• Massachusetts
• Mississippi
• New Hampshire
• North Carolina
• North Dakota
• Pennsylvania
• Rhode Island
• South Carolina
• South Dakota
• Washington, D.C.
• West Virginia

Take the first step to opening a daycare center today

Now that you know the general process of opening a daycare center, research the specific requirements for your state. A lot of work goes into opening a daycare business, but the time, money, and effort you invest will be returned to you through the change you bring to the families and children in your community.

Brightwheel is the complete solution for early education providers, enabling you to streamline your center’s operations and build a stand-out reputation. Brightwheel connects the most critical aspects of running your center—including sign in and out, parent communications, tuition billing, and licensing and compliance—in one easy-to-use tool, along with providing best-in-class customer support and coaching. Brightwheel is trusted by thousands of early education centers and millions of parents. Learn more at mybrightwheel.com .

Childcare and Preschool Supply List

A list of everything you need to start an early education program.

Subscribe to the brightwheel blog

Recent Posts

• Navigating Childcare Grants and Other Funding Resources in New Mexico May 17, 2024
• The Basic Concepts and Practices of the Montessori Method May 17, 2024
• Understanding Learning Styles and Multimodal Education May 17, 2024
• Navigating Childcare Grants and Other Funding Resources in Minnesota May 16, 2024
• Navigating Childcare Grants and Other Funding Resources in Mississippi May 16, 2024

Posts by Tag

• Running a business (199)
• Child development (164)
• Curriculum (83)
• Financial health (51)
• Staff development (47)
• Family engagement (40)
• Small business funding (38)
• COVID-19 (30)
• Technology (27)
• Family communications (15)
• Staff retention (15)
• ECE career growth (13)
• For Parents (10)
• Diversity and inclusion (9)
• Enrollment (7)
• Staff appreciation (7)
• Marketing (6)
• Public policy (6)
• Staff hiring (5)
• ECE current events (4)
• Family retention (4)
• Salary guides (4)
• Leadership (2)

View prices for your travel dates

• Excellent 0
• Very Good 0
• English ( 0 )

Own or manage this property? Claim your listing for free to respond to reviews, update your profile and much more.

Don't bother with copy and paste.

Get this complete sample business plan as a free text document.

Child Day Care Services Business Plan

Start your own child day care services business plan

Kid's Community College

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">.

Kid’s Community College® aims to prepare its students to excel as young leaders of tomorrow by combining an exclusive collegiate-based curriculum tailored specifically for children with enhanced, first class child care services. Unlike our competitors, we offer advanced technology programs, after-school tutoring, and activities such as arts and crafts, dance, theatre and gymnastics, all in one location.

Kid’s Community College is a privately held corporation run by its owner, Timothy Bernard Kilpatrick, Sr. Mr. Kilpatrick has 17 years of Executive Management (VP) and Budgeting experience, and extensive experience with budgeting methodologies and strategic planning, including the Balanced Scorecard approach. His advanced degree (and interest) in computer science is the driving force behind our technology component. He will be supported in daily operations by an industry consultant, a campus director, and a VP of educational operations, all with extensive experience in child care fields.

With inflation continuing to rise each year, the typical American family now requires dual or supplemental incomes. This trend has created a need for quality child care services. The population growth rate in the Riverview area of Hillsborough County is now over 14.6%, leading us to anticipate expanding market potential for this industry in our local area. Price, service, certification and reputation are critical success factors in the child care services industry. Kid’s Community College® will compete well in our market by offering competitive prices, high-quality child care services, and leading-edge educational programs with certified, college-educated instructors, and by maintaining an excellent reputation with parents and the community we serve.

This is a daycare business plan for Kid’s Community College®, which will focus on two subdivisions: ‘Lake St. Charles’ and ‘The Villages of Lake St. Charles,’ which are new upscale community developments within a 2 square mile radius, boasting over 900 new homes. Our target customers are dual-income, middle-class families who value the quality of education and child care we provide for their children, ages 4 months to 12 years.

We will open for business starting with an initial enrollment of 13 students. We project healthy revenues by the end of the first year, and expect to nearly triple that by the end of Year 3. Our biggest operating expenses will be compensation at industry standard rates for our highly-qualified personnel, and rent on our facilities, improved for our purposes during the start-up period. We would like to grow into four campuses, eventually, but growth is planned conservatively, to be financed from existing cash flow as we go. We anticipate a net profit beginning in our second year.

To these ends, we are putting significant investment in the business, and are seeking a matching amount in the form of an SBA loan.

“Some of the best years in life are the time spent as a child and later our collegiate years…” As working adults in a fast paced society, we sometimes forget just how precious and  fleeting those years are.

With that in mind, imagine an alternative to traditional infant, day and after school care that not only met your child care needs, but also provided an activity based learning environment that mirrors those used at colleges, universities and vocational centers around the nation.  A college community of professional care givers with the credentials to not only enhance your child’s early social and motor skills, but to also teach them advanced studies in the arts and sciences found at institutions of higher learning.  A collegiate-based curriculum tailored specifically for children, taught in a fun, nurturing care giving environment.

Now imagine this at a cost less than that of the combination of conventional day care and specific interest based children programs.

Kid’s Community College® is a start-up comprehensive community college exclusively for kids ages 4 months to 5 years and 1st through 5th grades.  The College dedicates its efforts and resources toward ensuring top-rated care giving services coupled with a high-quality activity based learning environment tailored for children in these age groups.  The College will respond to the needs of its parents and students with excellent care-giving and instruction, an advanced curriculum, flexible programs, local community involvement and business partnerships.

The College has a strong commitment to accessibility and diversity.  Its open door policy embraces all who desire to provide a better quality of care, preparedness and education for their children.  The College works to provide affordable, first-class care giving and education by providing a broad range of integrated programs and services and innovative learning approaches.

The College is committed to taking a leadership role in child care services, higher learning, community services and promoting cultural diversity.  Kid’s Community College® directs its activities towards student success.

• Sales increasing to almost double first year sales by the end of Year 2.
• Maintain a high raw gross margin by the end of Year 1.
• Open second campus by the end of Year 1.
• Begin franchise effort by end of Year 3.

Keys to Success

The keys to success for KCC are:

• Marketing: differentiating KCC’s care giving and educational services from traditional daycare offerings and interest activity programs.
• Service quality: care giving and educational programs provided by degreed and certified educators, child care workers, tutors and subject matter industry professionals in a technologically advanced first-class collegiate environment.
• Reputation: maintaining a highly regarded reputation for excellence in care giving, education and community involvement and being the employer of choice in our market for child care and educational talent.
• Profitability: controlling costs and managing budgets in accordance with company goals, adhering to strategic business plans for growth and expansion and reinvesting in the business and its employees.

Company Summary company overview ) is an overview of the most important points about your company—your history, management team, location, mission statement and legal structure.">

Kid’s Community College® – Lake St. Charles Campus will be located in Riverview, FL.  The College will employ six fundamentals that will serve as the driving force for the services offered:

• Premier Care Giving Services
• An Activity Based, Children Structured Collegiate Curriculum
• Advanced Technology and Developmental Programs
• Trademarked General and “Continuing” Education Mentoring and Tutoring 
• Learning Services
• Community Advancement and Involvement

The Lake St. Charles campus is a newly constructed, 3,600 square foot facility in the Lake St. Charles Medical Plaza and will be developed meeting strict KCC design standards, under close supervision of Hillsborough County child care Licensing.

Start-up Summary

The college founder and president, Mr. Kilpatrick, will oversee fiscal responsibility, employing an independent CPA for financial oversight.  A Campus Director will be hired to handle day-to-day operations of the facility and will work collaboratively with the silent partners and other campus personnel to ensure a successful business venture.

As reflected in the table below, the estimated start-up costs for KCC will be $39,450.  These costs will be financed solely by the owners’ personal cash funds and optional credit lines.  An anticipated $60,000 SBA guaranteed 5-year loan will be used as working capital.  Future expansion, growth and franchising strategy will be self-financed.

Brought to you by

Create a professional business plan

Using ai and step-by-step instructions.

Secure funding

Validate ideas

Build a strategy

Company Locations and Facilities

Kid’s Community College® will begin with one location – a newly constructed 3,600 square foot campus in Riverview, FL located near the entrance of the upscale Lake St. Charles subdivision.  The campus is in the Lake St. Charles Medical Professional center and will boast separate halls for arts and crafts, theatre and dance, information technology, library and quiet study, tutoring, infant care and a cafeteria.  The play area will be adjacent to the campus and will be securely fenced and furnished with appropriate playground equipment and facilities. 

Three additional campuses are planned in the rural Tampa marketplace over the next four years.  Franchise start-ups will be offered in the Orlando, Miami and Jacksonville marketplace after 2 years of successful operation.

Company Ownership

Kid’s Community College® is a privately-held proprietorship owned in majority by its founder and president, Timothy Bernard Kilpatrick, Sr.  There are also two silent partners, neither of whom owns more than 10%, but will be active participants in daily operations, management decisions and consulting, though they do not own a financial stake in the company.

Once the operation reaches its anticipated growth and profitability goals, the college plans to franchise and will re-register as a limited liability company or as a corporation, whichever will better suit the future business needs. 

Kid’s Community College® offers upscale child care services and an advanced collegiate based curriculum designed for kids ages 4 months to 5 years and 1st through 5th grades.  Normal operating hours will be 6:45am to 6:30pm, Monday through Friday – with observance of all major legal holidays.  Early drop-off service will be offered as needed. 

KCC exists to provide Premier child care services that are aimed at enhancing traditional day care methodologies and integrating extracurricular interests (such as arts and crafts, dance, theatre and gymnastics) into one comprehensive program.  Our activity based collegiate curriculum is specifically tailored for children and mirrors the arts and sciences taught at colleges, universities and vocational schools around the nation.  We offer state-of-the-art technology programs in leading-edge facilities which help prepare students for the technology age in which they live.  Our general and “continuing” education programs help mentor and tutor students through “main school” homework assignments and provide a base of understanding and interaction to ensure success in future educational endeavors.  Finally, our developmental programs reinforce basic social, listening, independence and motor skills and prepare students for future related interaction.

All of our learning and child care services employ technology, partnerships, professional services and other activities that support and promote higher learning.

In addition to the extensive services and curriculum offered, each campus will also offer weekend specialty classes for children and adults and planned family activities in the community it serves.  KCC will also offer children birthday party hosting services, providing great activities for kids and an easy experience for parents.  Activity instructors will be assigned for these events and will lead the activities, ensuring a memorable celebration. 

Service Description

Upon its opening, Kid’s Community College® will offer four basic services in the Lake St. Charles community:

• Full-time Child Day Care
• Part-time/After School Care (including drop-off and pick-up)
• After School Tutoring
• Drop-In Care

Prior to opening, the college will have a two-month enrollment drive.  Based on the market reaction to the drive, these services may be altered to meet the needs of the community.  The college will always remain nimble enough to respond to the needs of the community in which it serves.

Competitive Comparison

The child care industry as a whole is saturated.  However, based on US Census 2000 data, Hillsborough County Child Care Services provider listings and Hillsborough County building permit records, the city of Riverview, Florida itself is growing and has few licensed child care facilities.  Kid’s Community College® intends to fill this local market need.

The Lake St. Charles and ‘The Villages of Lake St. Charles’ subdivisions have 800 and 100 single family homes respectively. There are only two other child care facilities in the neighborhood. One is in the immediate area, a church based facility and the other is 2 miles away, a facility hosted by a local martial arts academy.  There are also three family child caregivers listed in the area, but none in the immediate community.  Kid’s Community College® will differentiate itself from its local competitors by offering an alternative to these traditional day care approaches. 

The Kid’s Community College® market strategy is based on providing an activity based learning environment that is used in many major colleges, universities and vocational centers around the nation. We will offer a community of professional caregivers with the credentials to not only enhance a child’s early social and motor skills, but to also teach them advanced studies in the arts and sciences found at institutions of higher learning.

Kid’s Community College® will be located in a new medical arts plaza, which has already shown a need and interest for child care services. The center currently has a pediatrics office and fitness center with clientele that has inquired about child care services. By forming collaborative partnerships with these businesses and becoming an active voice in the Lake St. Charles community, the college will position itself as the market share leader in child care services, development and educational offerings.

Sales Literature

A copy of the Kid’s Community College® informational brochure is attached in an appendix at the end of this document.

Fulfillment

The key fulfillment and delivery of services will be provided by the campus director, licensed campus instructors and staff workers. The real core value is the professional strength and industry expertise of the founder and silent partners, staff experience and certifications, education and hard work (in that order).

We will turn to qualified professionals for freelance back-up in tutoring and educational support, which will enhance the core values provided to the clients.

Since the company founder has an extensive Information Technology background, it’s only natural that Kid’s Community College® will employ and maintain the latest technology to enhance its curriculum, office management systems, payment processing and record keeping.

Future Services

Three additional campuses are planned in the rural Tampa marketplace over the next four years. Franchise start-ups will be offered in the Orlando, Miami and Jacksonville marketplace after 2 years of successful operation.

Market Analysis Summary how to do a market analysis for your business plan.">

Kid’s Community College® offers services which are vitally important in today’s fast paced, dual-income world. As an increasing number of families have become dependent on two incomes, the need for quality child care has skyrocketed. According to Florida Business Statistics, 84.6% of licensed child care facilities succeed and make a profit in their 1st year of operation.  Nationally, this number is 66.7%. 

Market Segmentation

Kid’s Community College® has a focus on meeting the local community need for child care services within the 10-mile radius of Riverview.  Students will be taken in flexibly on either a full-time or part-time basis.

Full-Time Working Couples

The college will establish a significantly large, full-time, regular client base in order to establish the healthy, consistent revenue base which will ensure stability of the business.  Customer and community relations are extremely important, as it is imperative to keep the parents pleased in order to keep their children in the college.

After School Care

Another large segment of the college’s business will be in the after school care market.  This client base will provide a higher profit for the college since instructor-to-student ratios are higher, and the students require more educational services, which are the primary focus of the college.  By offering tutoring, and advanced studies in technology, theatre, arts and sciences, the college will attract these profitable business clients, producing significant supplemental revenues.

Part-Time Workers/Drop-Ins

Part-time workers and Drop-Ins from the fitness center and locals businesses will comprise less than 1% of the revenues.  While this market is not a primary focus, sufficient flexibility to handle this market is important to the local ‘word-of-mouth’  marketing strategy.

Target Market Segment Strategy

The target market for Kid’s Community College® is full-time working couples. Referral marketing, direct-mail campaigns and community activity days will be the primary types of marketing strategies utilized. Maintaining and enhancing its reputation with families and in the community will be crucial in obtaining the planned market share growth of this target market.

Market Growth

According to US Census 2000 data, the population growth rate for Hillsborough county is approximately 2%, which is reflected in the market analysis summary. However, the Riverview area of Hillsborough County is experiencing a residential construction boom, yielding well over a 14.6% growth. This is supported by data obtained from the Hillsborough County Building Permits office and is included in the appendix of this plan. This suggests that more families continue to move into the Riverview area, thus becoming potential customers.

In our market analysis, we suggest a modest 6% yearly growth in the number of potential customers.

Market Needs

With inflation continuing to rise each year, the typical American family now requires dual or supplemental incomes. This trend has created a need for quality child care services. We do not see this model changing in the foreseeable future. In fact, based on the growth in the Riverview area, specifically the new Lake St. Charles and Village of Lake St. Charles communities, we expect the need to increase.

Market Trends

Currently there are more family caregivers than licensed child care facilities nationwide. However, this business model can’t keep up with the needs of the growing child care industry. In the family care giver paradigm, space is limited and quality of care is questionable – in many cases viewed as only slightly higher quality than babysitter services.

Service Business Analysis

Kid’s Community College® is in the child care services industry, which includes several models:

• Licensed Child Care Facilities: Business facilities that offer child daycare services.
• Family Child Care Homes: Individuals that offer child daycare services in their homes.
• Specific Interest Based Programs: Businesses that offer specialized instruction such as gymnastics, martial arts and athletics.
• Church Child Care Facilities: Religious organizations that offer child daycare services in their communities.

Competition and Buying Patterns

Price, service, certification and reputation are critical success factors in the child care services industry. Kid’s Community College® will compete well in our market by offering competitive prices, high-quality child care services, and leading-edge educational programs with certified, college-educated instructors, and by maintaining an excellent reputation with parents and the community in which we serve.

Main Competitors

• Weaknesses: May not appeal to customers of different religious beliefs. Unlicensed facility.  Non-accredited. 
• Weaknesses: Location – outside of middle-income market. Non-educational offering.  Building condition – prone to constant flooding. 
• Family Child Care Homes:
• Weaknesses: Capacity – only allowed a certain number of children. Non-professional stigma. 

Business Participants

• Specific Interest Based Programs: Martial Arts America
• Church Child Care Facilities: Christian Day Academy (not licensed).

Strategy and Implementation Summary

Kid’s Community College® will focus on two subdivisions: ‘Lake St. Charles’ and ‘The Villages of Lake St. Charles,’ which are new upscale community developments within a 2 square mile radius and boast over 900 new homes. 

The target customers are dual income, middle-class families who value the quality of education and child care provided for their children ages 4 months to 12 years.

Value Proposition

Kid’s Community College’s® value proposition is quite clear and quite easily distinguished from others in the market. We offer uniquely premium child care services, as measured by the curriculum and activities offered, experience and educational level of the instructors, community involvement and community college theme. 

Competitive Edge

We start with a critical competitive edge: there is no competitor in our market that is offering our concept, quality of educational program and child care services. Our educational approach is unique and we have a resource with over 25 years of child care expertise and over 17 years of technology savvy. Our positioning on these points is very hard to match, but only if we maintain the focus in our strategy, marketing, business development, and fulfillment. We should be aware that the tendency to dilute this expertise with bargain shopping could weaken the importance of our competitive edge, but we must continue to bolster our value proposition.

Marketing Strategy

Marketing in the child care industry depends largely on reputation and referral. At Kid’s Community College® that reputation will start within our community bolstered by our involved commitment to those we serve. 

Promotion Strategy

1.  Advertising –We’ll be developing our core positioning message: “A community college for kids!” to differentiate our service from the competition.  We will be using direct mail campaigns, pre-enrollment drives, and local community newspaper advertising to launch the initial campaign. 

2.  Sales Brochure –Our theme and curriculum will help sell the college to prospective clients. 

3.  Direct Mail –We will send quarterly direct mail campaigns to the housing developments in a 10-mile radius of the campus.  We will also offer monthly calendars for parents and the Lake St. Charles community, noting weekend family days and other open house approaches. 

4.  Community Involvement –We will be active in the Lake St. Charles community, sponsoring events at the community center for families and residents.

Marketing Programs

Catered open houses, parent survival days/nights, clubhouse pool parties and weekend movie matinees are but a few approaches we will utilize to reach out to our community.  We will also develop and maintain partnerships with local businesses that cater to the needs of children. 

Our pre-opening effort will include an application fee waiver, free children ID cards, T-shirts and a community block party sponsored and hosted by Kid’s Community College®.

Positioning Statement

For families who value the importance of higher education and quality child care services, Kid’s Community College® offers a great alternative to traditional child care services and specific interest based programs. Unlike those programs, KCC combines child care services with a modified collegiate level curriculum, just for kids!

Pricing Strategy

Kid’s Community College® must charge appropriately for the high-end, high-quality educational and care giving services we offer. Our revenue structure has to support our cost structure, so the salaries we pay to assure quality services must be balanced by the revenue we charge. 

We will be price competitive in the market we serve; however, we will not subscribe to the “low price leader” concept. The quality of our service will support the prices we charge.

Sales Strategy

Kid’s Community College® will sell its community college theme, services and offerings, separating itself from traditional daycare-only offerings.

We will be a one-stop shop for child care services, advanced learning and specialized program offerings.  We will also be active in the community, building a solid reputation with parents and the community.  By succeeding in these areas, we expect to begin seeing an operational net profit in month nine of the 1st year, while increasing enrollment by 32% monthly for the first 8 months and gradually thereafter, until our maximum allowed capacity is reached.

Sales Forecast

The following table and chart give a run-down on forecasted sales.  A detailed spreadsheet is also included in the appendix of this business plan. 

For the first eight months of operation, Kid’s Community College® has assumed a conservative enrollment due to the fact that school, aftercare and child care placement has already taken place for the school year and most parents will be comfortable with their current arrangements.  Consequently, we expect initial enrollment to be far less than anticipated future year levels. 

A sales increase of approximately 32% each month is expected until the start of the next school term, in August.  While this forecasted  increase seems large by industry standards, it is a good estimate based on initial enrollment.  Going into years 2 and 3, we expect that our presence will be known, convenience factor considered and we will then be a considered as a choice in August 2003.  In fiscal years 2004 and 2005, 80% and 90% of full enrollment is assumed respectively.

We expect to be open for business on January 1, 2003, starting with an initial enrollment of 13 students:

7 Full-time students at $115 each per week.  6 After-school students at $60 each per week and Drop-in revenue of approximately $100 per month. 

Sales Programs

Sales programs will include incentives for obtaining quarterly financial and enrollment goals, probationary period completion, passing county inspections and maintaining perfect attendance. 

Customer service awards will be provided for those employees who best exemplify the mission of Kid’s Community College® and exceed customers’ expectations. 

The accompanying table highlights important start-up milestones, with dates, completion status, responsible parties and budgets for each.  The milestone schedule indicates our emphasis on planning for implementation. 

What the table doesn’t show is the commitment behind it.  Our business plan includes complete provisions for plan-vs.-actual analysis, and we will hold monthly follow-up meetings to discuss the variance and course corrections. 

Strategic Alliances

As mentioned previously, Kid’s Community College® will form professional alliances with Impact Fitness to offer Drop-In child care services while parents work out.  We will also partner with Family Pediatrics to provide referrals of their existing customers.  A discounted rate will be offered in both cases.

Web Plan Summary

The Kid’s Community College® website will be the virtual business card and portfolio for the college, as well as its online “home.”

It will showcase the campus, curriculum and activity calendar for the school.  It will also provide for an Internet background of the instructors, online projects posted by the students, the campus newsletter and online enrollment. 

The Kid’s Community College® website will be simple, yet classy and well designed, but at the same time, in keeping with the latest trends in user interface design.  A site that is too flashy, or tries to use too much of the latest technology can be over-done, and may not be supported by all browsers. 

The key to the website strategy will be presenting a very well designed and informative Web presence that will market the Kid’s Community College® image, service offerings and community commitment.

Website Marketing Strategy

The Kid’s Community College® website will embody the mission of the college.  It will not only offer visitors the opportunity to “look around” the campus, but it will give them a good idea of the level of quality and service they can come to expect from the college.

Mostly informative in nature, the website will be a digital representation of our physical self. 

Development Requirements

The Kid’s Community College® website will be developed by the college founder, Timothy B. Kilpatrick, Sr., who has over 17 years of Information Technology experience.  Formation Technologies will host the site.

The site will be developed using Macromedia Dreamweaver 4, which will allow for support outside of Mr. Kilpatrick’s involvement.  The initial maintenance of the site will be done by Mr. Kilpatrick. 

Management Summary management summary will include information about who's on your team and why they're the right people for the job, as well as your future hiring plans.">

The opening management team of Kid’s Community College® will consist of the founder, a silent partner, a campus director and administrative assistant.

As the college grows, gradual investments in the instructional staff will be made over the next 3 years – beginning in June 2003 or as otherwise dictated by enrollment.

Organizational Structure

Kid’s Community College® depends on the founder, silent partner, Campus Director and VP of Education Operations for management in the following roles:

Management Team

Owner/President – Timothy B.  Kilpatrick, Sr.  The Owner/President will have overall fiscal responsibility, ensuring that the business is financially sound and attains its planned goals. 

• 17 years Executive Management (VP) and Budgeting experience
• Advanced degree in Computer Science
• Proven leadership and employee development ability
• Extensive experience with budgeting methodologies and strategic planning, including the Balanced Scorecard approach.

Industry Consultant – Carolyn Steverson.  The Industry Consultant will be relied upon for her industry expertise, providing valuable insight to rules, regulations and governmental programs that may benefit the college.

• 25 Year owner of Fat Albert Day Care Center
• Licensed child care facility owner
• Vast knowledge of Hillsborough County Child Care Licensing requirements and government supplemental programs

Campus Director – Candice Harris.  The Campus Director will be responsible for daily operations, curriculum oversight and management of all instructors, caregivers and tutors.

• B.S.  Degree in Education
• 2 years facilities administration/support experience with the University of South Florida
• 2+ years Regional Operations Manager
• 5+ years managerial/supervisory experience
• 3+ years grant writing, technical writing, workflow and process documentation experience

VP of Education Operations – Nitika Steverson-Kilpatrick

• Collegiate-level Public Relations education
• 5+ years customer service experience
• 8+ years child care industry experience (her mother owns Fat Albert Daycare)
• Extensive theatre and dance background

Management Team Gaps

The present team requires Child Care Development Associate credentials to support our value proposition and preparation for 2004 Florida child care requirements.  Currently, the Campus Director and Industry Consultant are the only members of the management team who have these credentials.

The Owner/President and VP of Education Operations will be enrolling in January 2003 to complete the six-month course required to obtain these credentials.  Education for these two can’t begin in this area until that time since it is a requirement that the college be open for business before the course work can begin.  Long-term, all full-time instructors will be required by the college (not the State) to obtain this credential.

Regarding financial administration, we will retain a strong CPA to help the owner guard cash flow.  While the owner is well versed in the worries of cash flow, he also has the sense to listen to reason and deal with constraints, as guided by the CPA.

Personnel Plan

The following table summarizes our personnel expenditures for the first three years, with compensation increasing from approximately $57K the first year to about $113K in the third.  We believe this plan is a fair compromise between fairness and expedience, and meets the commitment of our mission statement. 

The yearly figures in the second and third year are assumptions for the Lake St. Charles campus only.  The numbers reflect 100% enrollment, a full staff of instructors and a 5% payroll increase each year – which will include tuition reimbursement, pay increases, vacation pay, bonuses and state required certifications.

Financial Plan investor-ready personnel plan .">

• Adequate start-up capital is assumed, along with an SBA 5-year guaranteed loan.

Important Assumptions

The Kid’s Community College® financial plan depends on important assumptions, most of which are shown in the following table as annual assumptions.  The monthly assumptions are included in the appendices.  From the beginning, it is recognized that total enrollment is critical, which is a factor that must be influenced immediately.  Interest rates, tax rates, and personnel burden are based on conservative assumptions. 

The most important underlying assumption is that there is a strong need for the business in the Lake St. Charles community. 

Key Financial Indicators

The following benchmark chart indicates the key financial indicators for the first three years.  We foresee a gradual growth in sales (enrollment) and operating expenses into the second and third year.

It is projected that the raw gross margin will remain stable for the first three years since expenses are relatively indirect in the service based course work industry.  Operating expenses increase gradually as enrollment increases.

Enrollment is very important.  We must maintain an average weekly enrollment of 34 students for fixed cost coverage. 

Break-even Analysis

For the break-even analysis, start-up monthly running costs assumptions are shown in the the table below, including a three person payroll, rent, utilities and an estimation of other running costs.  Payroll, at median market averages, was presented previously in the Personnel table. 

Based on these assumptions, the chart below shows the enrollment of students per month needed to break-even.  This represents about 46% of our allowable monthly enrollment based on state and county course work guidelines.

Projected Profit and Loss

Our projected profit and loss is shown on the following table, with sales increasing from the first year to the third. 

In years two and three, we are projecting full enrollment regarding cost of sales and gross margin.  The investment return in these years supports the goal of opening another campus at the end of the second year and begin the franchise offering by the end of the third year.  Profit from the additional campuses and income from franchising are not included in this business plan. 

The detailed monthly projections are included in the appendices. 

Projected Cash Flow

The following cash flow projections show the annual amounts only, significant for the first year mainly in the amounts projected in cash sales and payables. 

Cash flow projections are critical to the success of Kid’s Community College®.  The monthly cash flow is shown in the illustration, with one bar representing the cash flow per month and the other the monthly cash balance.  The annual cash flow figures are included here and the more important detailed monthly numbers are included in the appendices. 

Projected Balance Sheet

The balance sheet in the following table shows managed but sufficient growth of net worth, and a gradually sufficient healthy financial position.  The monthly estimates are included in the appendices.

Business Ratios

The following table shows the projected businesses ratios for our industry: Child Day Care services, SIC code 8351. Kid’s Community College® expects to maintain healthy ratios for profitability, risk, and return.

The quickest way to turn a business idea into a business plan

Fill-in-the-blanks and automatic financials make it easy.

No thanks, I prefer writing 40-page documents.

Discover the world’s #1 plan building software

• Share full article

For more audio journalism and storytelling, download New York Times Audio , a new iOS app available for news subscribers.

How Biden Adopted Trump’s Trade War With China

The president has proposed new barriers to electric vehicles, steel and other goods..

This transcript was created using speech recognition software. While it has been reviewed by human transcribers, it may contain errors. Please review the episode audio before quoting from this transcript and email [email protected] with any questions.

From “The New York Times,” I’m Sabrina Tavernise, and this is “The Daily.”

[MUSIC PLAYING]

Donald Trump upended decades of American policy when he started a trade war with China. Many thought that President Biden would reverse those policies. Instead, he’s stepping them up. Today, my colleague, Jim Tankersley, explains.

It’s Monday, May 13.

Jim, it’s very nice to have you in the studio.

It’s so great to be here, Sabrina. Thank you so much.

So we are going to talk today about something I find very interesting and I know you’ve been following. We’re in the middle of a presidential campaign. You are an economics reporter looking at these two candidates, and you’ve been trying to understand how Trump and Biden are thinking about our number one economic rival, and that is China.

As we know, Trump has been very loud and very clear about his views on China. What about Biden?

Well, no one is going to accuse President Biden of being as loud as former President Trump. But I think he’s actually been fairly clear in a way that might surprise a lot of people about how he sees economic competition with China.

We’re going after China in the wrong way. China is stealing intellectual property. China is conditioning —

And Biden has, kind of surprisingly, sounded a lot, in his own Joe Biden way, like Trump.

They’re not competing. They’re cheating. They’re cheating. And we’ve seen the damage here in America.

He has been very clear that he thinks China is cheating in trade.

The bottom line is I want fair competition with China, not conflict. And we’re in a stronger position to win the economic competition of the 21st century against China or anyone else because we’re investing in America and American workers again. Finally.

And maybe the most surprising thing from a policy perspective is just how much Biden has built on top of the anti-China moves that Trump made and really is the verge of his own sort of trade war with China.

Interesting. So remind us, Jim, what did Trump do when he actually came into office? We, of course, remember Trump really talking about China and banging that drum hard during the campaign, but remind us what he actually did when he came into office.

Yeah, it’s really instructive to start with the campaign, because Trump is talking about China in some very specific ways.

We have a $500 billion deficit, trade deficit, with China. We’re going to turn it around. And we have the cards. Don’t forget —

They’re ripping us off. They’re stealing our jobs.

They’re using our country as a piggy bank to rebuild China, and many other countries are doing the same thing. So we’re losing our good jobs, so many.

The economic context here is the United States has lost a couple of million jobs in what was called the China shock of the early 2000s. And Trump is tapping into that.

But when the Chinese come in, and they want to make great trade deals — and they make the best trade deals, and not anymore. When I’m there, we turn it around, folks. We turn it around. We have —

And what he’s promising as president is that he’s going to bring those jobs back.

I’ll be the greatest jobs president that God ever created. I’ll take them back from China, from Japan.

And not just any jobs, good-paying manufacturing jobs, all of it — clothes, shoes, steel, all of these jobs that have been lost that American workers, particularly in the industrial Midwest, used to do. Trump’s going to bring them back with policy meant to rebalance the trade relationship with China to get a better deal with China.

So he’s saying China is eating our lunch and has been for decades. That’s the reason why factory workers in rural North Carolina don’t have work. It’s those guys. And I’m going to change that.

Right. And he likes to say it’s because our leaders didn’t cut the right deal with them, so I’m going to make a better deal. And to get a better deal, you need leverage. So a year into his presidency, he starts taking steps to amass leverage with China.

And so what does that look like?

Just an hour ago, surrounded by a hand-picked group of steelworkers, President Trump revealed he was not bluffing.

It starts with tariffs. Tariffs are taxes that the government imposes on imports.

Two key global imports into America now face a major new barrier.

Today, I’m defending America’s national security by placing tariffs on foreign imports of steel and aluminum.

And in this case, it’s imports from a lot of different countries, but particularly China.

Let’s take it straight to the White House. The president of the United States announcing new trade tariffs against China. Let’s listen in.

This has been long in the making. You’ve heard —

So Trump starts, in 2018, this series of tariffs that he’s imposing on all sorts of things — washing machines, solar panels, steel, aluminum. I went to Delaware to a lighting store at that time, I remember, where basically everything they sold came from China and was subject to the Trump tariffs, because that’s where lighting was made now.

Interesting.

Hundreds of billions of dollars of Chinese goods now start falling under these Trump tariffs. The Chinese, of course, don’t take this lying down.

China says it is not afraid of a trade war with the US, and it’s fighting back against President Trump with its own tariffs on US goods.

They do their own retaliatory tariffs. Now American exports to China cost more for Chinese consumers. And boom, all of a sudden, we are in the midst of a full-blown trade war between the United States and Beijing.

Right. And that trade war was kind of a shock because for decades, politicians had avoided that kind of policy. It was the consensus of the political class in the United States that there should not be tariffs like that. It should be free trade. And Trump just came in and blew up the consensus.

Yeah. And Sabrina, I may have mentioned this once or 700 times before on this program, but I talk to a lot of economists in my job.

Yeah, it’s weird. I talk to a lot of economists. And in 2018 when this started, there were very, very, very few economists of any political persuasion who thought that imposing all these tariffs were a good idea. Republican economists in particular, this is antithetical to how they think about the world, which is low taxes, free trade. And even Democratic economists who thought they had some problems with the way free trade had been conducted did not think that Trump’s “I’m going to get a better deal” approach was going to work. And so there was a lot of criticism at the time, and a lot of politicians really didn’t like it, a lot of Democrats, many Republicans. And it all added up to just a real, whoa, I don’t think this is going to work.

So that begs the question, did it?

Well, it depends on what you mean by work. Economically, it does not appear to have achieved what Trump wanted. There’s no evidence yet in the best economic research that’s been done on this that enormous amounts of manufacturing jobs came back to the United States because of Trump’s tariffs. There was research, for example, on the tariffs on washing machines. They appear to have helped a couple thousand jobs, manufacturing jobs be created in the United States, but they also raised the price of washing machines for everybody who bought them by enough that each additional job that was created by those tariffs effectively cost consumers, like, $800,000 per job.

There’s like lots of evidence that the sectors Trump was targeting to try to help here, he didn’t. There just wasn’t a lot of employment rebound to the United States. But politically, it really worked. The tariffs were very popular. They had this effect of showing voters in those hollowed-out manufacturing areas that Trump was on their team and that he was fighting for them. Even if they didn’t see the jobs coming back, they felt like he was standing up for them.

So the research suggests this was a savvy political move by Trump. And in the process, it sort of changes the political economic landscape in both parties in the United States.

Right. So Trump made these policies that seemed, for many, many years in the American political system, fringe, isolationist, economically bad, suddenly quite palatable and even desirable to mainstream policymakers.

Yeah. Suddenly getting tough on China is something everyone wants to do across both parties. And so from a political messaging standpoint, being tough on China is now where the mainstream is. But at the same time, there is still big disagreement over whether Trump is getting tough on China in the right way, whether he’s actually being effective at changing the trade relationship with China.

Remember that Trump was imposing these tariffs as a way to get leverage for a better deal with China. Well, he gets a deal of sorts, actually, with the Chinese government, which includes some things about tariffs, and also China agreeing to buy some products from the United States. Trump spins it as this huge win, but nobody else really, including Republicans, acts like Trump has solved the problem that Trump himself has identified. This deal is not enough to make everybody go, well, everything’s great with China now. We can move on to the next thing.

China remains this huge issue. And the question of what is the most effective way to deal with them is still an animating force in politics.

Got it. So politically, huge win, but policy-wise and economically, and fundamentally, the problem of China still very much unresolved.

Absolutely.

So then Biden comes in. What does Biden do? Does he keep the tariffs on?

Biden comes to office, and there remains this real pressure from economists to roll back what they consider to be the ineffective parts of Trump’s trade policy. That includes many of the tariffs. And it’s especially true at a time when almost immediately after Biden takes office, inflation spikes. And so Americans are paying a lot of money for products, and there’s this pressure on Biden, including from inside his administration, to roll back some of the China tariffs to give Americans some relief on prices.

And Biden considers this, but he doesn’t do it. He doesn’t reverse Trump’s tariff policy. In the end, he’s actually building on it.

We’ll be right back.

So Jim, you said that Biden is actually building on Trump’s anti-China policy. What exactly does that look like?

So Biden builds on the Trump China policy in three key ways, but he does it with a really specific goal that I just want you to keep in mind as we talk about all of this, which is that Biden isn’t just trying to beat China on everything. He’s not trying to cut a better deal. Biden is trying to beat China in a specific race to own the clean-energy future.

Clean energy.

Yeah. So keep that in mind, clean energy. And the animating force behind all of the things Biden does with China is that Biden wants to beat China on what he thinks are the jobs of the future, and that’s green technology.

Got it. OK. So what does he do first?

OK. Thing number one — let’s talk about the tariffs. He does not roll them back. And actually, he builds on them. For years, for the most part, he just lets the tariffs be. His administration reviews them. And it’s only now, this week, when his administration is going to actually act on the tariffs. And what they’re going to do is raise some of them. They’re going to raise them on strategic green tech things, like electric vehicles, in order to make them more expensive.

And I think it’s important to know the backdrop here, which is since Biden has taken office, China has started flooding global markets with really low-cost green technologies. Solar panels, electric vehicles are the two really big ones. And Biden’s aides are terrified that those imports are going to wash over the United States and basically wipe out American automakers, solar panel manufacturers, that essentially, if Americans can just buy super-cheap stuff from China, they’re not going to buy it from American factories. Those factories are going to go out of business.

So Biden’s goal of manufacturing jobs in clean energy, China is really threatening that by dumping all these products on the American market.

Exactly. And so what he wants to do is protect those factories with tariffs. And that means increasing the tariffs that Trump put on electric vehicles in hopes that American consumers will find them too expensive to buy.

But doesn’t that go against Biden’s goal of clean energy and things better for the environment? Lots of mass-market electric vehicles into the United States would seem to advance that goal. And here, he’s saying, no, you can’t come in.

Right, because Biden isn’t just trying to reduce emissions at all costs. He wants to reduce emissions while boosting American manufacturing jobs. He doesn’t want China to get a monopoly in these areas. And he’s also, in particular, worried about the politics of lost American manufacturing jobs. So Biden does not want to just let you buy cheaper Chinese technologies, even if that means reducing emissions.

He wants to boost American manufacturing of those things to compete with China, which brings us to our second thing that Biden has done to build on Trump’s China policy, which is that Biden has started to act like the Chinese government in particular areas by showering American manufacturers with subsidies.

I see. So dumping government money into American businesses.

Yes, tax incentives, direct grants. This is a way that China has, in the past decades, built its manufacturing dominance, is with state support for factories. Biden is trying to do that in particular targeted industries, including electric vehicles, solar power, wind power, semiconductors. Biden has passed a bunch of legislation that showers those sectors with incentives and government support in hopes of growing up much faster American industry.

Got it. So basically, Biden is trying to beat China at its own game.

Yeah, he’s essentially using tariffs to build a fortress around American industry so that he can train the troops to fight the clean energy battle with China.

And the troops being American companies.

Yes. It’s like, we’re going to give them protection — protectionist policy — in order to get up to size, get up to strength as an army in this battle for clean energy dominance against the Chinese.

Got it. So he’s trying to build up the fortress. What’s the third thing Biden does? You mentioned three things.

Biden does not want the United States going it alone against China. He’s trying to build an international coalition, wealthy countries and some other emerging countries that are going to take on China and try to stop the Chinese from using their trade playbook to take over all these new emerging industrial markets.

But, Jim, why? What does the US get from bringing our allies into this trade war? Why does the US want that?

Some of this really is about stopping China from gaining access to new markets. It’s like, if you put the low-cost Chinese exports on a boat, and it’s going around the world, looking for a dock to stop and offload the stuff and sell it, Biden wants barriers up at every possible port. And he wants factories in those places that are competing with the Chinese.

And a crucial fact to know here is that the United States and Europe, they are behind China when it comes to clean-energy technology. The Chinese government has invested a lot more than America and Europe in building up its industrial capacity for clean energy. So America and its allies want to deny China dominance of those markets and to build up their own access to them.

And they’re behind, so they’ve got to get going. It’s like they’re in a race, and they’re trailing.

Yeah, it’s an economic race to own these industries, and it’s that global emissions race. They also want to be bringing down fossil-fuel emissions faster than they currently are, and this is their plan.

So I guess, Jim, the question in my mind is, Trump effectively broke the seal, right? He started all of these tariffs. He started this trade war with China. But he did it in this kind of jackhammer, non-targeted way, and it didn’t really work economically. Now Biden is taking it a step further. But the question is, is his effort here going to work?

The answer to whether it’s going to work really depends on what your goals are. And Biden and Trump have very different goals. If Trump wins the White House back, he has made very clear that his goal is to try to rip the United States trade relationship with China even more than he already has. He just wants less trade with China and more stuff of all types made in the United States that used to be made in China. That’s a very difficult goal, but it’s not Biden’s goal.

Biden’s goal is that he wants America to make more stuff in these targeted industries. And there is real skepticism from free-market economists that his industrial policies will work on that, but there’s a lot of enthusiasm for it from a new strain of Democratic economists, in particular, who believe that the only chance Biden has to make that work is by pulling all of these levers, by doing the big subsidies and by putting up the tariffs, that you have to have both the troops training and the wall around them. And if it’s going to work, he has to build on the Trump policies. And so I guess you’re asking, will it work? It may be dependent upon just how far he’s willing to go on the subsidies and the barriers.

There’s a chance of it.

So, Jim, at the highest level, whatever the economic outcome here, it strikes me that these moves by Biden are pretty remarkably different from the policies of the Democratic Party over the decades, really going in the opposite direction. I’m thinking of Bill Clinton and NAFTA in the 1990s. Free trade was the real central mantra of the Democratic Party, really of both parties.

Yeah, and Biden is a real break from Clinton. And Clinton was the one who actually signed the law that really opened up trade with China, and Biden’s a break from that. He’s a break from even President Obama when he was vice president. Biden is doing something different. He’s breaking from that Democratic tradition, and he’s building on what Trump did, but with some throwback elements to it from the Roosevelt administration and the Eisenhower administration. This is this grand American tradition of industrial policy that gave us the space race and the interstate highway system. It’s the idea of using the power of the federal government to build up specific industrial capacities. It was in vogue for a time. It fell out of fashion and was replaced by this idea that the government should get out of the way, and you let the free market drive innovation. And now that industrial policy idea is back in vogue, and Biden is doing it.

So it isn’t just a shift or an evolution. It’s actually a return to big government spending of the ‘30s and the ‘40s and the ‘50s of American industrialism of that era. So what goes around comes around.

Yeah, and it’s a return to that older economic theory with new elements. And it’s in part because of the almost jealousy that American policymakers have of China and the success that it’s had building up its own industrial base. But it also has this political element to it. It’s, in part, animated by the success that Trump had making China an issue with working-class American voters.

You didn’t have to lose your job to China to feel like China was a stand-in for the forces that have taken away good-paying middle-class jobs from American workers who expected those jobs to be there. And so Trump tapped into that. And Biden is trying to tap into that. And the political incentives are pushing every future American president to do more of that. So I think we are going to see even more of this going forward, and that’s why we’re in such an interesting moment right now.

So we’re going to see more fortresses.

More fortresses, more troops, more money.

Jim, thank you.

You’re welcome.

Here’s what else you should know today. Intense fighting between Hamas fighters and Israeli troops raged in parts of Northern Gaza over the weekend, an area where Israel had declared Hamas defeated earlier in the war, only to see the group reconstitute in the power vacuum that was left behind. The persistent lawlessness raised concerns about the future of Gaza among American officials. Secretary of State Antony Blinken said on “Face the Nation” on Sunday that the return of Hamas to the North left him concerned that Israeli victories there would be, quote, “not sustainable,” and said that Israel had not presented the United States with any plan for when the war ends.

And the United Nations aid agency in Gaza said early on Sunday that about 300,000 people had fled from Rafah over the past week, the city in the enclave’s southernmost tip where more than a million displaced Gazans had sought shelter from Israeli bombardments elsewhere. The UN made the announcement hours after the Israeli government issued new evacuation orders in Rafah, deepening fears that the Israeli military was preparing to invade the city despite international warnings.

Today’s episode was produced by Nina Feldman, Carlos Prieto, Sidney Harper, and Luke Vander Ploeg. It was edited by M.J. Davis Lin, Brendan Klinkenberg, and Lisa Chow. Contains original music by Diane Wong, Marion Lozano, and Dan Powell, and was engineered by Alyssa Moxley. Our theme music is by Jim Brunberg and Ben Landsverk of Wonderly.

That’s it for “The Daily.” I’m Sabrina Tavernise. See you tomorrow.

• May 17, 2024   •   51:10 The Campus Protesters Explain Themselves
• May 16, 2024   •   30:47 The Make-or-Break Testimony of Michael Cohen
• May 15, 2024   •   27:03 The Possible Collapse of the U.S. Home Insurance System
• May 14, 2024   •   35:20 Voters Want Change. In Our Poll, They See It in Trump.
• May 13, 2024   •   27:46 How Biden Adopted Trump’s Trade War With China
• May 10, 2024   •   27:42 Stormy Daniels Takes the Stand
• May 9, 2024   •   34:42 One Strongman, One Billion Voters, and the Future of India
• May 8, 2024   •   28:28 A Plan to Remake the Middle East
• May 7, 2024   •   27:43 How Changing Ocean Temperatures Could Upend Life on Earth
• May 6, 2024   •   29:23 R.F.K. Jr.’s Battle to Get on the Ballot
• May 3, 2024   •   25:33 The Protesters and the President
• May 2, 2024   •   29:13 Biden Loosens Up on Weed

Hosted by Sabrina Tavernise

Produced by Nina Feldman ,  Carlos Prieto ,  Sydney Harper and Luke Vander Ploeg

Edited by M.J. Davis Lin ,  Brendan Klinkenberg and Lisa Chow

Original music by Diane Wong ,  Marion Lozano and Dan Powell

Engineered by Alyssa Moxley

Listen and follow The Daily Apple Podcasts | Spotify | Amazon Music | YouTube

Donald Trump upended decades of American policy when he started a trade war with China. Many thought that President Biden would reverse those policies. Instead, he’s stepping them up.

Jim Tankersley, who covers economic policy at the White House, explains.

On today’s episode

Jim Tankersley , who covers economic policy at the White House for The New York Times.

Background reading

Mr. Biden, competing with Mr. Trump to be tough on China , called for steel tariffs last month.

The Biden administration may raise tariffs on electric vehicles from China to 100 percent .

There are a lot of ways to listen to The Daily. Here’s how.

We aim to make transcripts available the next workday after an episode’s publication. You can find them at the top of the page.

The Daily is made by Rachel Quester, Lynsea Garrison, Clare Toeniskoetter, Paige Cowett, Michael Simon Johnson, Brad Fisher, Chris Wood, Jessica Cheung, Stella Tan, Alexandra Leigh Young, Lisa Chow, Eric Krupke, Marc Georges, Luke Vander Ploeg, M.J. Davis Lin, Dan Powell, Sydney Harper, Mike Benoist, Liz O. Baylen, Asthaa Chaturvedi, Rachelle Bonja, Diana Nguyen, Marion Lozano, Corey Schreppel, Rob Szypko, Elisheba Ittoop, Mooj Zadie, Patricia Willens, Rowan Niemisto, Jody Becker, Rikki Novetsky, John Ketchum, Nina Feldman, Will Reid, Carlos Prieto, Ben Calhoun, Susan Lee, Lexie Diao, Mary Wilson, Alex Stern, Dan Farrell, Sophia Lanman, Shannon Lin, Diane Wong, Devon Taylor, Alyssa Moxley, Summer Thomad, Olivia Natt, Daniel Ramirez and Brendan Klinkenberg.

Our theme music is by Jim Brunberg and Ben Landsverk of Wonderly. Special thanks to Sam Dolnick, Paula Szuchman, Lisa Tobin, Larissa Anderson, Julia Simon, Sofia Milan, Mahima Chablani, Elizabeth Davis-Moorer, Jeffrey Miranda, Renan Borelli, Maddy Masiello, Isabella Anderson and Nina Lassam.

Luke Vander Ploeg is a senior producer on “The Daily” and a reporter for the National Desk covering the Midwest. More about Luke Vander Ploeg

Advertisement